Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Tuesday, 21 February 2017

UK asking price growth slows

Asking prices slow

The rate of UK house price growth has slowed to +2.3 per cent according to Rightmove and its asking price index, which is some way below the rate of growth recently recorded by the Halifax and the Office for National Statistics.

A slowdown in asking prices may be no bad thing, if it means that more properties actually transact.

The early part of 2016 was punctuated by a flurry of buy-to-let activity to avoid the April 2016 stamp duty deadline, which naturally we aren't seeing this year. 

Solid growth was still recorded in the East of England (+4.8 per cent) and the South East (+3.1 per cent), while we're also starting to see some price growth in the North West in markets such as Manchester.

London saw its asking prices jump by +2.3 per cent in the month of February back up £641,116.

Asking prices in the capital over the past year are now flat however, with the inner London market unusually accounting for the weakness.

It's not hard to imagine what's happened to the premium sector of the market where in some cases liquidity has all but evaporated. 

There have been significant falls in asking prices in the most expensive boroughs, with prices down sharply in Kensington & Chelsea (-14.6 per cent, including -14.4 per cent or £360,000 in just one month), and Hammersmith & Fulham (-10.8 per cent year-on-year).

Granted, the enormous monthly fall in asking prices in part likely represents premium properties not being listed as much as actual price falls, but even so the weakness in the premium sector of the market is apparent. 

Don't shed too many tears, though, for the average asking price in Kensington & Chelsea is still well over £2.1 million even after the February decline. 

The absurd stamp duty brackets will fail to raise any worthwhile extra revenue, since transaction levels  in some premium markets have simply dried up. 

Nationally average days on market have increased a bit from 68 to 79 days since this time last year, while stock levels are down, albeit marginally. 

What is to the detriment of the expensive boroughs can be a gain for the cheaper end of town.

There has been some sprightly growth in some of the boroughs we like, including Greenwich (+7.4 per cent), and Croydon (+6.4 per cent), while Camden was top of the tree for asking price growth over the year to February 2017.

Decline, Road Sign, Warning, 14