Rightmove released its October UK asking price index data today which recorded the usual October rise of 2.6 percent.
Readers may recall that I couldn't resist biting at some of the absurd reporting of the August data where pundits who clearly misunderstand London market data called excitedly a market crash based on one month of figures.
I suggested waiting for the October data, given the significant seasonality of the index. Sure enough, asking prices 'rose' by 7 percent in London in the month.
Of course it is plainly ridiculous to look at volatile monthly data in this manner - instead you need to observe the trends, and an easy way to do this is to chart the data, which I have done below.
London prices have risen by more than 130 percent since May 2003. No matter which way you try to torture the data, there is no crash, but through our on-the-ground experience what we do see is a moderation ahead (click chart to expand).
If you have been following our London commentary for a while, you will know that we believe that the London property market has now moderated. Prices have not fallen, but the market mania has certainly subsided, and competition for properties has eased from the frantic panic buying seen across the past year.
Rightmove's index is very noisy, so I have charted the data on a 6 month moving average basis below, which we believe is beginning to reflect the moderation in London market growth that we have seen on the ground.
It is not surprising to see one of the locations where we have bought property for our clients in the best performing list - Ealing - where investor interest in the market is now rising as we expected thanks to the impact of the "game-changing" Crossrail project.
Perhaps the biggest story from this month's Rightmove release is that the south-east of England with a +10 percent growth asking prices over the past year is now taking over from London as the leader of UK property price growth.
A mass migration to the south-east of the country combined with an acute dwelling shortage is expected to see prices boom over the years ahead. Rightmove and Oxford Economics forecast an extraordinary 37 percent capital growth for the south east over the next five years and 33 percent capital growth for London:
"The ripple effect of buyers priced out of London combined with those cashing in and moving out of the capital means that the South East has taken London’s boom-town crown. Upwards price pressure is being further fuelled by a reluctance of home owners in the hotspots of the South East to come to market.
Analysis by Rightmove and Oxford Economics forecasts that the South East will be the region with the highest increase in property values in the next five years, driven by a continuation of this supply/demand imbalance in the medium term. While the national average is a 30% uplift, the South East is forecast to be up by 37%, ahead of London at 33%."