UK property drought worsens driving prices higher
- Supply of property for sale falls across the UK; down by 10% (July 2015 vs. July 2014).
- Prices move up 0.6% overall in England and Walesâ€¨during the last month.
- London prices rose the most this month, up 1.5% since July.
- The South East remains the UK’s fastest regional market, with a typical time on market of 61 days.
- The average annual home price appreciation for England and Wales rises to 6.2%.
- ‘Housing crisis’ is only apparent in London and surrounding regions
According to the Home.co.uk Asking Price Index for August 2015, the UK property market continues to enjoy considerable momentum despite talk of mortgage rates rising in the near future.
A combination of buyer demand and short supply is driving prices higher, but at a lesser rate than last year. The supply crisis is becoming more acute, and July recorded the lowest number of properties entering the market for that month since the onset of the financial crisis.
Lack of supply is felt most keenly in London and the East of England, where the volumes of properties entering the market are down 23% and 16% respectively. These and other southern regions are clearly sellers’ markets and prices are firmly on an upward trajectory.
Marketing times in the South East continue to be the lowest in the country. Indeed, across the nation, marketing times are currently around the lowest we have witnessed since 2008.
Buyer demand coupled with low numbers of properties entering the market has led to a significant reduction in the total stock for sale.
The number of properties on the market in England and Wales is 11% lower than in August last year and 39% less than in August 2007. Hence in the southern regions, where supply problems are most acute, buyers have only half the choice that was afforded to them eight years ago. Ultra- low interest rates and other stimulus measures have ensured that more money (largely new debt) is chasing ever fewer properties.
Overall, the current mix-adjusted average asking price for England and Wales is 6.2% higher than it was in August 2014, and we expect further price rises over the coming months.