The housing market is showing some positive signs as asking prices have bounced back and activity is picking up again in London after two years of decline, estate agents’ figures suggest.
Average asking house prices rose by 0.7 per cent or £2,088 to £304,061 between August and September, up from a decline of 2.3 per cent the previous month, according to Rightmove.
Annual growth was only slightly higher at 1.2 per cent, from 1.1 per cent in August, although the situation varies greatly across the country, as pointed out by other studies.
London property: The capital is showing signs of renewed buyer activity at the upper end of the market
More affordable areas like Wales, East and West Midlands and Yorkshire & Humber all recorded annual price rises of at least 4 per cent, while the North East and South East saw prices decline.
And London is showing signs of renewed buyer activity at the upper end of the market after years of sluggish activity and declining prices in some areas.
Prices in the capital are still falling month-on-month – by 0.5 per cent overall – but there was also a 6 per cent rise in the number of sales agreed for homes of £750,000 and over compared to September last year.
This has been helped by the fact that asking prices in inner London have gone down from a peak of £823,000 in February 2016 to a current £756,000 – a decrease of £76,000, or 8 per cent.
However, sales of cheaper properties below the £750,000 mark are still down by 3.6 per cent, the report found.
Variations: The East Midlands saw the biggest annual rise in asking prices
Rightmove director Miles Shipside said that a couple of years of price falls in some areas have led to buyers returning to the market.
But he added: ‘The recovery in the upper end is encouraging but the painful and drawn-out process of price reductions has yet to run its course especially in parts of outer London and the commuter belt that saw very sizeable and unsustainable price rises.
‘More sellers and agents will need to re-adjust their expectations to be in line with what buyers are willing or able to pay, as it seems that buyers are out there if the price is right.’
Geoff Wilford, founder of Wilfords Estate Agents in London, said it saw a 15 per cent increase in sales enquiries compared to last year and a 10 per cent rise in sales agreed, as prices have softened.
‘Buyer enquiries are up with a number of people believing now is a good time to buy when other people are selling,’ he said.
‘I’m of the firm belief that when the pendulum swings back from being a buyer’s market to a seller’s market the current levels of pent up demand will result in a price increase, as was witnessed back in 2013. In my opinion the smart money is buying now.’
Prices rose by 0.7 per cent, or £2,088 to £304,061 between August and September
As it is usual with autumn months, activity increased across the country, with 16 per cent more properties coming on to the market in the first week of September compared to the average of the final three summer weeks.
The East Midlands saw the biggest annual rise in asking prices of 4.7 per cent, followed by Wales, where prices climbed 4.6 per cent, the West Midlands at 4.5 per cent and Yorkshire & the Humber with growth of 4 per cent.
Conversely, the North East saw the biggest year-on-year decline of 1.1 per cent, while London overall saw prices decline 0.5 per cent and the South East by 0.1 per cent.
Brian Murphy at the Mortgage Advice Bureau said the September report seemed to be in line with normal trading conditions for this time of the year.
‘The Rightmove data suggests a modest upwards movement in the average asking price, but the advice that many agents have given their vendors over the past few months with regards pricing realistically in order to secure a buyer appears to have been heeded, with only a slight increase on an annualised basis.
‘This feels pretty reasonable against the context of the ongoing low levels of homes available for sale, particularly in areas of high confidence such as the East and West Midlands, Wales and Yorkshire and the Humber.’
Commenting on renewed activity in London, Murphy warned: ‘It’s important to make the distinction between an increase in activity and an increase in house prices – whilst the Rightmove data points to the first green shoots of the former in the capital, there aren’t many signs of the latter as yet.’