" There are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves."
Although the annual rise remains muted at 1.2%, Rightmove believes the autumn market has stronger momentum in areas with better affordability and sentiment, with Wales, East Midlands, West Midlands and Yorkshire & the Humber all recording average annual price rises of at least 4%.
Additionally, substantial price reductions in some parts of the London market over the last two years are now helping to improve sentiment and momentum, with renewed buyer activity evident at the upper end.
The London market has seen a 6% rise in number of sales agreed for homes of £750,000 and over compared to same month last year.
Additionally, ‘back to school’ season is offering more choice for buyers, with a 16% jump in new properties coming to market in the first week of September compared to the average of the final three summer weeks.
Miles Shipside, Rightmove director and housing market analyst, commented: “Buyer affordability has been increasingly stretched by seven years of national average property price rises outstripping buyers’ average wage inflation. However in London, after asking prices rose by over 50% between 2011 and their peak in 2016, there have been two years of subsequent price falls in parts of the capital. Now, there are signs that these price reductions in parts of London have led to an upturn in buyer activity as sentiment improves.
“Buyer affordability ratios were not stretched to the same degree in the Midlands and the North than they were in the South, with a comparatively modest average price increase of 21% since 2011. That’s left some price momentum fuel still in the tank in these regions, and means that the current momentum has the mileage to carry on into this Autumn. That compares to the seven-year 40% plus price binge seen in London and its commuter belt neighbours of the South East and East of England, which is the cause of their current indigestion.
“It’s been a hard and rocky road to recovery at the upper end of the London market, taking two successive years of price falls. London is a barometer and sometimes a catalyst for rises and falls in the rest of the UK housing market. The recovery in the upper end is encouraging but the painful and drawn-out process of price reductions has yet to run its course especially in parts of Outer London and the commuter belt that saw very sizeable and unsustainable price rises. More sellers and agents will need to re-adjust their expectations to be in line with what buyers are willing or able to pay, as it seems that buyers are out there if the price is right.
“The start of the ‘back to school’ season sees a surge of sellers coming to market compared to the preceding quieter holiday period. Sellers aren’t hanging back in coming forward to try and sell, and with average prices just 1.2% higher than a year ago, many seem to be pricing sensibly.”
