Annual growth in house prices in England and Wales will reach 3.1% in September and 2.8% in October, the highest level seen since November 2018, according to the reallymoving House Price Forecast released today, as buyers race to complete deals before the Brexit deadline of 31 October.
Average values are set to rise by 1.5% over the next three months (August to October 2019), continuing their steady climb. Particularly strong growth in August will see prices increase by 3.2%, before dipping by -1.4% in September.
As homebuyers register for quotes for home move services on the site typically twelve weeks before their purchase completes, reallymoving is able to provide an accurate three-month property price forecast based on the purchase price agreed. They also provide both seasonally and mix adjusted data, accounting for the seasonal trends in house prices and variations in the location and types of properties quoted for. Historically, reallymoving’s data has closely tracked the Land Registry’s Price Paid data, published retrospectively.
Monthly price changes
Against a backdrop of economic and political uncertainty, the UK housing market has performed remarkably strongly through the early summer, with a 6.0% surge in prices in June and a further 3.2% increase forecast in August. This resilience is most likely driven by a significant pent up demand from homeowners who need to move but have held off during recent months and years, who now fear the window up to October could represent their best opportunity. While buyers are being selective and seeking bargains, there is also a lack of stock which is helping support values. HMRC have released figures showing that 16.5% fewer property deals were made in June 2019 compared to June 2018, further supporting the idea that a discrepancy between supply and demand of properties is partially responsible for driving the increase in house prices.
Annual price changes
Annual price growth has been in positive territory since June and will remain so for the next three months, with prices in October forecast to be 2.8% higher than twelve months previously. This is the highest rate of annual growth seen for nearly a year, since November 2018.
Underlying conditions in the broader economy continue to underpin the housing market and support year on year price growth, particularly high employment levels, low interest rates and rising household incomes.
Analysis and commentary
Rob Houghton, CEO of reallymoving, comments: “The outlook for the property market over the next three months is remarkably positive, considering the current political and economic context. The recent election of a new Prime Minister who is committed to leaving the EU on Halloween even if a deal isn’t reached could mean clouds are gathering on the horizon, but any impact on prices in the short term is likely to be mitigated by the urgency of home movers to complete deals in the next three months.”
Rob said that in the longer term the outlook remains uncertain however the market could see an uplift if suggestions of stamp duty reform come to pass. “We could see a Boris Bounce in the property market if he is true to his word over stamp duty reform and stimulates the market through tax cuts at the top and bottom. Scrapping stamp duty for downsizers could be a cost-effective way to stimulate activity throughout the market, freeing up family homes and enabling chains of transactions, at relatively little cost. Annually, house prices in October are on track to be 2.8% higher than they were in October 2018, which is further evidence that home movers have become tired of the wait and see approach and decided to move on with their lives.”