Despite continued price growth in England’s most thriving regional property markets, the decline in London prices and seasonal factors are weighing a heavy burden on the national average.
The latest findings from property website Home.co.uk revealed that over the last month prices dropped in six of the nine English regions and in Scotland and Wales, although prices continue to rise in the North West and the East and West Midlands.
While home values are falling in and around London, the effect has been by no means calamitous, with the slide in house prices in the capital for the past four months consistent with a period of ‘post-boom stagflatory malaise’.
With non-housing inflation currently running at approximately 4.5%, according to the retail price index (RPI), and the national average price gain sitting at 3%, there are many who argue that the current situation is one of stagflation. To give this some context, five out of the nine English regions recorded annualised growth at, or below, the present RPI ex-housing figure.
However, it’s not simply house price growth that is currently lagging behind inflation. There has also been stagnation when it comes to rental prices across the UK mainland in the last year, with no change in the past 12 months.
It’s a mixed picture when analysing things on a regional basis, although landlords in London and the South East were the worst hit, with average rents falling in these areas by 3.2% and 1.2% respectively.
The total opposite is the case for the UK’s most dynamic and booming rental markets, though, with considerable rental increases (over and above the rate of inflation) witnessed in both the East and West Midlands and the North West (up year-on-year by 5.9%, 5.2% and 7.3% respectively). The indications are that these regions – propelled by both increasing house prices and rents, alongside a fall in the time properties spend on the market – will continue to outperform the average in the coming months.
The UK property market as a whole remains stable, despite fluctuations on a regional basis. Supply remains relatively tight across the board, although some regional variations do apply. Overall, total stock levels remain near their 10-year lows, while demand continues to rise. This is helping to keep house prices high across the UK.
The annualised rate of increase of home prices was 3.8% in November 2016, but this has now dropped to 3% for November this year.