Today’s October house price statistics as released by the Office of National Statistics, state that house prices are rising fast and particularly in London. They say ‘House prices continue to increase strongly across the UK with prices in London again showing the highest growth’.
Agents with their fingers on the pulse know that the UK property market is cooling. Demand has tailed off because the significant uplift that we have seen in most areas over the past 18 months was deemed unsustainable by potential buyers and this is particularly true in an overheated London market. Fears over potential interest rate rises, the recent Mortgage Market Review (MMR) and political uncertainty have not assisted matters.
What we now have is a more balanced situation and certainly not the sellers’ market that the media delighted in reporting on up until recently.
So the ONS figures as published today seem odd. Out of synch in fact. Or, indeed, just wrong. And a quick look at the timing of the ONS numbers reveals why in that they are collated from mortgage completions, an event that is many months away from when each property was first marketed and sold. In other words, the stats are out of date as soon as they are published and probably more accurately reflect the housing market as it was in June/July.
The latest eMoov Property Hotspot Index will be published next week and demonstrates a drop in buyer demand of 8% across the country, 28% in the capital. This index is the only industry measure that analyses a current snapshot of demand for property against available supply and, therefore, shows exactly what is happening here and now in the top 100 towns and cities in England, Scotland and Wales.
The trouble with out of date resources such as the ONS and the HM Land Registry is that they muddy the true picture and, worryingly, can skew how sellers and agents price newly listed homes. Discouraging reductions in asking price by way of this misinformation, often much needed in the current climate, can also be really detrimental.
Despite the headlines that will emanate from today’s false data, believe me, prices in London especially are not ‘increasing strongly’ now.