Average overall price growth in England and Wales has slipped into the red, according to Home.co.uk’s February Asking Price Index. This is the first time negative growth has been seen since November 2011, after 87 straight months of price rises.
The national average has been pushed into the red year-on-year, largely due to falling prices in London and the South East. Prices have also been sliding in the South West and the East of England.
In the last year, London house prices have declined by 3.3% - and are now down 6.9% since the start of May 2016, when the slide first began.
Elsewhere, asking prices in the South East and the East are now falling faster, with losses increasing to 2.5% and 1.8% respectively. In January, the South West ‘became the latest domino to fall’, with prices in this region down 0.5% year-on-year.
The downbeat national figures do, though, disguise a much more positive performance in other regions, with significant growth in locations further north and west. House price growth has been at its most prevalent in Wales and the West Midlands, where asking prices are now 6.4% and 5% higher than they were a year ago.
In addition, the North West and Yorkshire have witnessed average asking prices rising by 4.3% and 3.4% respectively over the last year.
The Midlands’ markets, however, are slowing – with the typical time properties spend on the market growing. Supply in the West and East Midlands is up 10% and 13% respectively, with Home expecting this to rise further over the coming months as investors attempt to cash out at the top
The property website says the indicators are that these will be the next dominoes to fall (with the East Midlands first in line). Such activity would be consistent with market behaviour previously observed when the markets in the East and South East peaked.
Across the UK, the supply of property for sale in the UK is up by 4% year-on-year, with the total stock for sale growing by 10.1%.
This is placing a squeeze on house prices as the supply-demand gap narrows. In February 2018, the annualised rate of increase of house prices was 2.3%; today the same measure is -0.2% and continues to trend downwards below zero.
The typical time on market for properties in England and Wales also continues to rise, according to Home. It’s now up to 114 days, six days longer than in February 2018.
While the largest supply increases were observed in the West Midlands, Scotland and the East Midlands, there is some hope for the London market as supply has started to slow (down 13% year-on-year).
The Index also found that 3% more properties were reduced in price whilst on the market in January 2019 compared to the year before.