The May 2003 asking price index from Rightmove.co.uk provides new evidence that home buyers are returning to the market in steadily increasing numbers, with more than 110,000 properties coming off the market in April – as many as the number coming on. This reverses the trend of earlier this year when the market was swamped with new instructions while few prospective homeowners were out actively buying.
This suggests a better balance between supply and demand, and between sellers and buyers, and tends to support the view that the housing market is entering a more stable phase.
Nationally, annual house price inflation fell for the fifth month in a row to 15.6%. Month-on-month (April to May 2003) prices rose by 1.3%. Over the first 5 months, the rise was 4.7%, equating to an annualised figure of 11.6% - compared with in excess of 25% last year.
The northern regions of the country continue to fare significantly better than southern ones, with the largest monthly rises in the North (+4.4%), North West (+3.6%) and Yorkshire (+3.3%). In contrast, Greater London saw a price fall of 1.0% over the month, while price rises were small in the East Midlands (+0.7%) and South East (+0.9%).
Rightmove’s regional analysis of properties by price shows that the regions seeing continued rising prices are among those with the largest proportion of properties in the NIL stamp duty band (i.e. up to £60,000) or the lower end of the 1% band: 59.3% of properties in the North were marketed at less than £125,000, 51.5% in the North West and 47.1% in Yorkshire. At the other end of the spectrum, almost 40% of properties in Greater London and 28% of those in the South East fell into the higher (3%-4%) stamp duty bands (i.e. over £250,000) – and these are the areas where house prices have been least buoyant.
In London, higher value boroughs, mainly in inner and western parts of the capital, are seeing price falls, with Kensington & Chelsea down almost 13% over the past quarter, Hammersmith & Fulham down 6%, Enfield down 5% and Haringey, Southwark and Richmond down around 4%. Generally speaking, outer London boroughs have seen price increases – with Redbridge, Bromley and Hillingdon being the big risers.
Ed Williams, managing director of Rightmove, says:
“The springtime surge in homebuying has been late this year as people have had their minds elsewhere. Now our agents are starting to see more activity and more transactions are being done. With interest rates low and no real signs of the feared economic slowdown, confidence levels among homebuyers seem to be picking up again.”
Miles Shipside, Rightmove’s commercial director, says: “The market is shaking off its wartime blues and homebuyers are now beginning to look in earnest. What differentiates ‘steady 2003’ from ‘crazy 2002’ is that there’s plenty of good quality property on the market and there’s less pressure to buy quickly before prices rise. I’d say now is probably a better time for the buyer to find the right home at the right price, and most sellers are now being more realistic in their price expectations.”
