Rightmove is reporting a mini-boom as the autumn market gets into gear, with a surge in buyers and a one-month rise in asking prices that mirrors the long-term average - and even London’s performance is improving slightly.
The portal’s market snapshot for September, out this morning, says the price of property coming on sale has risen by a national average of 0.7 per cent this month: that’s equivalent to £2,088 and is the same as the average September increase of the past seven years.
It cautions that the national annual rate of increase remains muted at 1.2 per cent but reports some positive signs for the autumn market in regions where affordability and sentiment are good.
Significantly, what Rightmove calls “substantial price reductions in some parts of the London market over the last two years” are now helping to improve sentiment and momentum, with renewed buyer activity evident at the upper end of the capital's market.
“Buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation” explains Miles Shipside, Rightmove director and housing market analyst.
“However in London, after asking prices rose by over 50 per cent between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts. Now, there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves.”
Less stretched buyer affordability and positive market sentiment have helped to buoy some regions to attain average annual rises of at least four per cent - the East Midlands (up 4.7 per cent), Wales (4.6 per cent), West Midlands (4.5 per cent) and Yorkshire & the Humber (up 4.0 per cent).
Conversely, there have been year-on-year price falls in the North East (down 1.1 per cent), London overall (down 0.5 per cent) and the South East (a mere 0.1 per cent down).
“Buyer affordability ratios were not stretched to the same degree in the Midlands and the North than they were in the South, with a comparatively modest average price increase of 21 per cent since 2011. That’s left some price momentum fuel still in the tank in these regions, and means that the current momentum has the mileage to carry on into this autumn” says Shipside.
The upturn in London’s buyer activity this month is seen most vividly in the upper end of the market, above £750,000, comprising around a fifth of all transactions in the capital.
The number of sales agreed above £750,000 is up by 6.0 per cent on the same month a year ago, while below £750,000 it is down by 3.6 per cent.
Average asking prices in Inner London peaked in February 2016 at £823,000, and are now £756,000, which has helped with the increase in buyer activity.
Shipside says: “The recovery in [London’s] 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.”
Autumn traditionally sees a boost in activity and this will be fuelled by more choice for buyers with a 16 per cent jump in new properties coming to market in the first week of September compared to the average of the final three summer weeks.