House prices set to dip over next quarter

Average house prices in England and Wales are set to see an average 0.9% monthly drop over the next three months, according to the reallymoving House Price Forecast.

The findings – based on conveyancing quote data collected in June, July and August – revealed that average prices will dip by 1.4% in September, 0.3% in October and 1.0% in November. reallymoving says these falls can be attributed to the market peaking in late summer before tailing off through the autumn.

Monthly price changes

Over the next three months, average values are set to fall by a total of 2.6% due to seasonality changes.

Average values show positive growth between September and November, which suggests the falls are seasonal rather than reflecting a drop in the underlying value of property.

Deals agreed in August will reflect a fall of just 1.0% when those sales complete in November, indicating the resilience of the housing market supported by a lack of stock available for sale.

Annual price changes

Year-on-year, house prices are on course to remain in positive territory throughout the autumn. A 3% annual increase forecast for September will be the highest rate of annual house price growth for almost a year, followed by 2.7% in October and 2.1% in November 2019.

Other conditions in the wider economy, such as low unemployment, low interest rates and rising household incomes, continue to support the housing market and steady year-on-year growth.

Regional three-month price forecasts

House prices in Wales, Scotland and Northern Ireland are expected to continue their upward trajectory, with values forecast to rise by 8.7%, 3.8% and 1.9% respectively over the next three months.

England presents a mixed picture, however, with prices set to fall across the north, declining in the North East, North West and Yorkshire & Humber, as well as in the South East (-1%), South West (-2.2%) and East (-1.8%).

London is set to see a moderate bounce of 1.5% overall in the same period, but a dip of 2.3% forecast for November suggests that buyers in the capital were more cautious in August, factoring in a buffer to protect them from future price falls.

Rob Houghton, chief executive officer of reallymoving, comments: “Considering the current political situation, the UK housing market continues to show remarkable resilience.”

“House prices are on course for minor monthly falls in September, October and November, but while the temptation is to attribute this to Brexit, in fact it is largely down to seasonality with the market following its usual pattern of peaking in August then tailing off steadily through autumn.”

He concludes: “Nationally, annual growth is set to remain in positive territory throughout the autumn, indicating that people are continuing to press ahead with home moves and the underlying value of the housing market remains stable.”