Rightmove’s house price index is a monthly report that primarily studies the asking price of properties listed on the major property portal, as well as a number of other property market performance indicators, such as the number of homes sold.
Rightmove’s index is not as concrete as other more established indices in terms of the actual prices listed, as the data is based on the asking price a buyer is listing a property for and not what they sold it for. However, it does give a thorough insight into how sellers and approaching the sale of their property, as well as an indicator of buyer demand in terms of the number being found through the portal.
The latest numbers released by Rightmove today show that house prices have dropped by -0.4% (£1,172) for the month of June, the first decline during the summer month since the peak of the credit crunch in 2009. As a result, the average asking price reported by Rightmove in the UK is £316,109, down from £317,281 for the month of May.
However, the number of sales is up and is at its second highest over the past decade, slightly trailing the numbers from May 2014. The first-time buyer (FTB) sector has also seen a +3.5% jump month-on-month and a +5.5% increase year-on-year. The average price paid by FTBs for the month of June sits at £199,943, up from £193,242 for the month of May. The property market in the North shows an impressive increase of +11% in sales annually, whereas the south only saw a +3% jump year-on-year.
But with sales performing strongly in what is traditionally a busy time of year for property sales, how can prices have dipped across the UK? Well looking at the regional trend provides a clearer picture and actually, the majority of England has seen price increase, with strong buyer demand across the North, East, South West and Wales.
However, the areas to have seen a decrease, have done so because the markets there have become overinflated and the average house price in those regions, is for the large part, much higher than the rest of the country. So when all the data is combined, the overall view is a marginal drop, despite the nation still seeing large swathes of strong buyer demand.
It’s not often that sales increase whilst asking prices reduce but we’ve seen a number of unique external influences on the market over the last year or so and the eMoov CEO and founder, Russell Quirk, was on hand to explain more.
Anyone that claims the political landscape has no direct impact on the UK housing market need only to look at the latest index from Rightmove to be told otherwise.
Yes, the portals data may not provide the most concrete view of how the sector is performing due to the figures being based on asking price rather than completions, but it certainly gives us a flavour of the current buyer-seller market seesaw.
With the snap election in June, it is no wonder price momentum stalled as both buyer and seller alike held off until some greater stability for the nation was decided. Unfortunately, stability was the last thing we received at the start of the month and so not only will this period of uncertainty now be prolonged, but it is likely the market will continue to splutter where price growth is concerned.
That said, it is probably unfair to be drawing comparisons to the market during the peak of the credit crunch as we are in a much steadier climate now compared to then. Although price growth is likely to remain stagnant for the rest of the year, it is unlikely that we will see any notable dips, perhaps a marginal adjustment if any.Russell Quirk