The UK property market has entered a period of stagflation where house price growth is consistently lower than the rate of inflation.
That’s the view of property website Home which says house price growth has been lower than inflation for six consecutive months.
Its latest data, drawn from monitoring properties listed on the major portals, suggests that whilst the average asking price is now 3.3 per cent more than in July 2016, the Retail Price Index is rising faster - Home says it increased by 4.1 per cent in May and could now be approaching 4.5 per cent, making house prices fall in real terms by around 1.2 per cent.
At present, only four regions are showing what Home calls “genuine real rises in asset values” namely the East of England, the East Midlands, the West Midlands and the South West.
With Greater London, the worst performing area, showing zero price growth year-on-year, it is these regions that are supporting the current overall growth figure.
Other headlines from the latest Home index show:
- House prices nudge up by 0.2 per cent month- on-month and 3.3 per cent year-on-year but fall by around 1.2% in real terms;
- Greater London prices edge up by 0.1 per cent over the past month but average prices there remain unchanged since July 2016;
- Longer marketing times in the East of England, South East and Greater London reveal the slowdown occurring in these formerly vigorous property markets;
- West Midlands and East Midlands top the monthly price rises, joined by Scotland and Wales, with rises of 0.8, 0.6, 0.7 and 0.6 per cent respectively;
- Typical Time on Market across England and Wales rises by four days to 82 days, the same as in July 2016;
- The number of properties entering the UK market is up overall by 5.0 per cent year-on-year; and
- Supply has surged further in the East, London and South East, by 18, 21 and 14 per cent respectively compared to June 2016.