The latest housing index from Rightmove has caused a stir, revealing that prices have hit their lowest point since November and have dropped 1.2 per cent nationwide. Londoners in particular seem hardest hit with the average price falling 2.6 per cent.
It’s very easy to put the entire blame on Brexit and increases in Stamp Duty, but the underlying cause across the UK is seasonal. The figures are compiled between 10 July and 6 August when the property market, along with the schools, tends to take its summer holidays. To support my point, 1.2 per cent over the past six years is the average seasonal summer drop, according to Rightmove – we are simply following the natural curve.
Prime Central London, on the other hand, has been undeniably hit by increases in Stamp Duty and the uncertainty surrounding Brexit – confidence is subdued and summer has just compounded what has been a tricky few months.
Buyers of multi-million pound properties in PCL don’t tend to ‘have’ to move. They’re looking to add to an already healthy global property portfolio and the energy that has been apparent in recent years just isn’t there.
It’s a different story further out in the Shires where momentum continues for ‘must movers’. Rightmove reported that prices in the West Midlands and Yorkshire & Humberside rose over the past month. Our own Humberts research highlights a different element to the Rightmove story; more Londoners than ever before are moving out of the capital.
Our data cites that 280,000 home movers left London in 2015, a three per cent rise on the previous year. Young people, in particular 20-29 year-olds, are the largest migrators. They’re looking to get as much for their money as possible in prosperous cities such as Birmingham and Brighton.
According to the Annual Survey of Hours and Earnings and the Land Registry, average house prices in London are now 17.5 times the gross average salary – the Rightmove figures, although seasonal, are a signpost that continued house price leaps in London can’t continue at the same pace.
Yes, prices have taken a dip, but we are confident that September will bring about a renewed sense of energy, particularly in the domestic London market and in the regions. The marginally lower interest rate will also be attractive to those looking to secure mortgages.
Healthy property market activity is taking place across the UK and there is a good amount of buyer competition – my message is, strike while the September iron is hot.