reallymoving House Price Forecast July 2019
10 July 2019
By Andi Forsythe
reallymoving's July 2019 House Price Forecast
House prices in England and Wales are set to rise by 1.2% over the next three months (June to September 2019), propelled by strong growth in August which will see average values increase by 3.2% before dipping again in September, according to the reallymoving House Price Forecast
Graph 1: reallymoving House Price Index (England and Wales) including 3-month price forecast
The spring market got off to a slow start this year but a busy May for house hunters is expected to translate to price rises in August when those sales typically complete. As homebuyers register for quotes for home move services on the site typically twelve weeks before their purchase completes, providing data on the purchase price agreed, reallymoving is able to provide an accurate three-month property price forecast before those deals complete three months’ later. Historically, reallymoving’s data has closely tracked the Land Registry’s Price Paid data, published retrospectively (see Graph 1).
With a No Deal Brexit looking more likely, buyers and sellers who have pursued a ‘wait and see’ approach are now keen to get a deal done before the 31st October deadline, when it is feared house prices could undergo a significant adjustment.
Monthly price changes
A more resilient than expected spring market was reflected in substantial monthly house price growth in June, which saw average prices in England and Wales increase by 6.5% compared to May. This can be partly attributed to the seasonal effect, but reallymoving’s seasonally adjusted figures also show growth of 3.2%, indicating that the market saw genuine strong growth in values for sales completing at the start of the summer. Average values are set to remain relatively stable in July, dipping by just 0.5%, followed by a surge of 3.2% between July and August.
Annual price changes
Annually, property values fell consistently between January and May 2019, but as predicted, this trend reversed at the start of the summer when prices increased by 2.3% in June compared to twelve months previously. Annual growth is forecast to remain in positive territory through the summer, with a 0.7% annual increase forecast in July, followed by 1.2% in August and 3.8% in September. The forecast figure for September represents the strongest annual growth seen for ten months, since the previous peak of 4.3% growth in November 2018.
Graph 2: Year on Year average price changes (England and Wales) including 3-month forecast
The majority of regional markets are showing resilience in the face of continued uncertainty, with two thirds of the UK’s twelve regions forecast to see prices rise during the three-months to September 2019.
In particular Northern Ireland (+6%), Wales (+5.7%) and Scotland (1.5%) are all on track to see strong positive growth. England on the other hand presents a mixed picture, with southern regions (with the exception of London) continuing to experience steady growth, meanwhile values in the North East are expected to readjust by -4.8% and in the North West by -2.8%.
Despite average values in London rising strongly in June, this early summer optimism is expected to be wiped out by falls over the remainder of the summer, resulting in net growth of -0.1% in the capital between June and September. London continues to lag behind other regions, bearing the brunt of Brexit uncertainty and decades of over inflated house price growth, particularly in the prime property sector, worsened by an exodus of investors.
Graph 3: reallymoving House Price Index (East Midlands) including 3-month price forecast
Reallymoving’s online House Price Forecast is an interactive tool providing house price information and forecasts for every region of the UK, from January 2013 to present, alongside Land Registry price paid data. Highlighting the East Midlands this month, prices fell sharply at the start of the year but have since climbed steadily and are on course to achieve 4% growth between June and September to reach £226,343.
Analysis and commentary
Rob Houghton, CEO of reallymoving, comments: “The spring market was more robust than expected and this has prompted positive growth through the summer, particularly for deals agreed in May which are translating to sale prices in August.
“The chance of us leaving the EU without a deal seems increasingly likely and people are realising that the window between now and the end of October may present their best opportunity to sell. The market has proved itself to be surprisingly stable over the last twelve months but this could change if we crash out of the EU on Halloween.
“Annually prices are on an upward trajectory from June through to September, when they are forecast to end the summer 3.8% higher than in September 2018, but the longer-term outlook remains uncertain. There is huge pent up demand in the market, however, and if the UK is able to agree a deal with the EU we could see a rush of properties hitting the market in the late autumn along with a surge in buyer demand.
“A mixed picture remains regionally, but there are twice as many regions forecast to see price growth over the summer than price falls, with particularly strong performances in Wales, Scotland and Northern Ireland.”
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