There are certain points each month, I look forward to, one of which being the release of the house price indexes and last month was no different. The September 2018 Halifax House Price Index saw prices across our nation rise by 2.5% to an average of £225,995 year on year. The Nationwide House Price index also reported growth in house prices of 2% to circa £214,745.
Just as a side note, I thought I’d share the below image taken from the Nationwide Sept 2018 House Price Index which demonstrates which area has had the most growth in the UK year on year, namely the Yorkshire and Humber region.
It’s great to see that since my last insights episode, prices are still on the rise but bear in mind, since the previous episode (last month), prices have actually dropped on a monthly basis by 1.4% according to Halifax but according to Nationwide, increased slightly month-on-month by 0.3%. What this tells us is that property prices are far too volatile to compare month-on-month or even to a certain extent, quarterly.
This is emphasised by the below graph taken from the Sept 2018 Halifax index which shows the spread far more evenly on an annual basis.
At a more local level, looking at the August 2018 Land Registry index, property prices in York increased annually by 1.28% (to £249,951 on average). Breaking it down even further, the greatest growth over the last year was in semi-detached York properties, which rose by 2.1% in value, followed by detached properties a 1.7% increase, terraced houses a 1.24% increase and flats showing a slight decline of 0.26%.
It will be interesting to see what impact seasonality has on property prices in the region. One good lead indicator is the RICS House Price Index. The two graphs below (taken from the RICS Sept 2018 index) shows the effect of seasonal sentiment in the market as the level of new vendor instructions in Yorkshire and Humber reduces by nearly 25% from the previous month (the largest drop in new properties coming to the market across the nation).
Interestingly, buyer enquiries showed a slight increase from the previous month of around 2.5%. One school of thought is that property prices will rise as there is an uplift in buyer enquiries with less stock on the market.
So what do you think will happen to property prices over the next 3-6 months?