Prices drift lower despite rise in demand and sales agreed
Issued: 29 October 2012
| Summary | Aug | Sept | Oct 2012 | Change |
|---|---|---|---|---|
| Monthly price change (%) | -0.1 | -0.1 | -0.1 |  |
| % change in new buyers registering with agents | -1.3 | -3.6 | 0.3 |  |
| % change in volume of property listing | 0.8 | -0.9 | 1.4 | |
| % change in sales agreed | 6.4 | -0.4 | 9.2 | |
| Average time on the market (weeks) | 9.5 | 9.9 | 9.9 | |
| % of the asking price being achieved | 93.0 | 93.0 | 93.2 | |
| % postcode districts with price increase over month | 3.6 | 6.0 | 5.7 |  |
| % postcode districts with price decrease over month | 27.1 | 23.6 | 31.0 | |
Results at a glance
- House prices fell by 0.1% over October. This is the third consecutive month in a row that prices have fallen. This in spite of a rise in demand and sales agreed.
- However year-on-year house price inflation is currently registering the lowest rate of price falls for two years (currently -0.4%).
- Price rises earlier in the year and a slowdown in the rate of price falls in northern regions explain the improvement in the year-on-year rate of growth.
- In the north of the country there are signs that prices are firming with a steady decline in the size of the gap between asking and achieved prices over the last 6 months.
- Re-pricing older stock to a level where sales can take place has been a key trend over summer. As a result October saw a 9.2% increase in the number of sales agreed. Double digit growth in sales was seen in the midlands and Wales.
- Overall demand for housing remains subdued. The modest headline increase in demand nationally was largely driven by a 3.9% jump in new buyer registrations in London. This follows four consecutive months (June – September) of falling demand in the capital.
- The time to sell indicator remains largely unchanged despite a slowing in price falls over the last two years. The time on the market over October averaged around 12 weeks in the midlands and northern regions, eight weeks in the south and less than six in London.
- While the UK has moved back into economic growth and out of recession in the third quarter of 2012, the housing market will not see a sustainable recovery until there is sustained growth in the economy and real household incomes.
Figure 1“The proportion of the asking price achieved has moved up to 93.2%. Increases indicate some recovery of prices. The time on the market remains unchanged at 9.9 weeks with some major regional variations." |
Figure 1 Time on the market and % asking price achieved
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Figure 2“The balance between supply and demand leads underlying house price changes by 3 months. The improved balance over the first half of 2011 led an improvement in the underlying rate of growth.”
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Figure 2 Supply demand balance leads price changes by 3 months
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Figure 3“Figure 3 shows the proportion of postcodes registering higher and lower prices over time. Prices were down across 31% of postcodes in October 2012 compared to 23.6% in September.”
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Figure 3 Proportion of country registering higher and lower prices
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