Rightmove.co.uk’s November House Price Index, based on properties coming onto the market up to 7th November, includes the first effects of sellers’ changing behaviour leading up to and after the 6th November rate rise – heralded by the publication of the previous MPC minutes on 22nd October. Asking prices fell by 0.1%, compared with the whopping 3.3% rise last month, while annual inflation remains below 10% for the third month running, at 9.9%.
Miles Shipside, commercial director of Rightmove, comments: “The strong autumn surge we saw last month is already running out of steam and the market is entering into the traditionally calm period in the run-up to Christmas – as happens every year. I wouldn’t expect any big rises in house prices now till after the New Year. While asking prices may have been adjusted a little in response to the rate rise – widely expected from late October onwards – and fears of further hikes, it’s fair to say that even without the increase in the cost of mortgages we’d still be seeing a cooling-off of the market at this point. Maybe the housing market didn’t need the rate increase at all.”
Stock levels continue to fall nationally and the Rightmove Market Indicator this month shows 47,310 more properties coming off the market than coming on – following a trend seen over the past 6 months.
However, this month the fall in stock levels is not a trigger to rising house prices, as the effect of the seasonal slowdown combined with expectations of rising interest rates in the future begin to have an influence. Miles Shipside continues: “Supply of properties on agents’ books is still rather short, but at the same time there will be fewer people actively looking over the next month as buying Christmas presents will take precedence over buying houses. What’s important is that prices are stable, economic confidence is sound and mortgage rates are still very low by historic standards, so conditions will remain good for people looking to sell or buy a house through into the New Year.”
Time on Market indicator for the whole country is unchanged at 66.2 days, compared with 72 days at the beginning of the year and just under 70 days in September.
In Greater London, asking prices rose again this month, by 1.1%, on top of a large surge of 4.5% last month. This brings average prices in the capital to £265,725, as compared with £262,868 in October.
Miles Shipside says: “The London market has had a bit of a choppy ride over the past year, but prices have now risen over the past couple of months. They are now just £69 higher than 12 months ago. It looks as if we will be ending the year with house price inflation virtually flat in London, with zero change year-on-year and ongoing prices pretty stable. Given all the gloomy predictions we’ve had from so many quarters over the past few months, that’s by no means a bad way to start 2004.”
In contrast to the rest of the country, the London Market Indicator shows an easing of the imbalance between properties coming on the market and coming off, with a fall in the net ‘surplus demand’ figure from 6,340 to 4,490. This may be an effect of the slowdown in the housing market as the Christmas and New Year holiday period approaches.
Time on Market for London stands at 72.3 days, slightly up on last month’s 69 days but still lower than the highs of almost 80 days in the summer and 81.7 at the beginning of this year.
Looking at the various regions, this month sees prices rising in most western regions, with Wales up 4.4%, West Midlands up 1.9%, North West up 1.1% and South West up 0.4%. The East Midlands also rose, by 0.9%. Most northern and eastern regions recorded declining asking prices, with a 4.1% fall in the North, 2.2% fall in the South East, and 1.8% fall in both Yorkshire & Humberside and East Anglia.
Year-on-year house price inflation has generally been strongest in regions that are furthest from London, and lowest in London and its surrounds. Over the year Wales and the North West have been the biggest winners, up 24.5% and 20.2% respectively, with the North, Yorkshire & Humberside and the East Midlands all around the 17% mark.
Miles Shipside explains, in summary: “After strong price rises reported by Halifax and Nationwide over the past couple of months – mirroring the rising prices we saw on properties coming onto the market in the summer – the reduction in asking price inflation this month is a welcome sign. It provides clear evidence that the market is cooling down – partly due to seasonal factors, partly due to the ‘symbolic’ rise in interest rates – and hopefully means that any possible further rate hike by the MPC can at least be put off until well into 2004.”
