The latest data on UK house prices and price growth from the Land Registry was released today showing that in August the market increased by 0.5% month on month, with an increase of 5% annually.
Although this is the ninth consecutive month that growth levels have been subdued, the increase is positive news for UK homeowners after a tough year or so for the property market.
The Land Registry provides the most concrete view of the UK market as the data is based on sale completions and not asking price or mortgage applications like the other major industry indices.
Between July and August, transaction levels did dip slightly by 0.5%, however, this is due to the seasonality of buyers putting their property sale on the back burner during the holiday months and, in fact, transaction volumes are up 6.6% compared to the same time last year.
However, there is still an abundance of buyer demand across the UK with enquiries remaining high, although buyers and sellers alike are treading with a tad more caution than previously, with more opting for a ‘wait and see’ approach with a marginal 1% drop in new properties coming onto the market as well as the marginal fall in transactions.
The latest Land Registry data also highlights the diversity of the UK property market as, despite an overall market slowdown, nine out of 13 regions have enjoyed monthly price growth and all have seen prices increase annually. The largest increases have been right across the nation with the North West, South West, East of England and East Midlands all enjoying an annual increase of 6.4%.
Largest UK Increase: Wellingborough
Largest Welsh Increase: Gwynedd
Largest English County Increase: Rutland
Largest Scottish Increase: Shetland Islands
The London market has been hit hardest by market uncertainty from Brexit and the election as many foreign investors refrain from their purchase and UK home buyers hold tight before committing to such a large financial commitment. London has seen the slowest rate of annual growth of all UK regions at 2.6% and is one of just three to have seen a drop month on month, down -1%, with Wales (-1%) and Scotland (0.7%) also seeing a fall.
Monthly London House Price Growth
Annual London House Price Growth
But it’s not all bad news for London homeowners. Both Camden and Hackney have enjoyed double-digit annual growth at 13% and 11.7% respectively. Kensington and Chelsea, City of Westminster and City of London are the only boroughs to have seen a fall.
A rather modest rate of growth continues for the UK market but positive growth none the less, which is good news for homeowners given the turbulent market conditions.
This slowdown in price growth may seem as unusual as the sun that shone over the UK yesterday but there are positive signs peeping through the clouds. While a slowing London market may be putting a dampner on the overall forecast, England continues to lead the way where prices are concerned with many areas seeing strong annual growth.
It’s a testament to the diversity and resilience of the UK market that this growth is spread across the North West, South West, East and Midlands.
With a sustained level of buyer interest, albeit more cautious than usual, the market should weather any potential storm on the horizon, with the dark clouds of recent market uncertainty already starting to lift.Russell Quirk