Housing Transactions Pause for Summer Holidays, Your Move Shows

Housing transactions have paused for the summer holidays, while house prices also stopped for breath in July, according to the latest House Price Index from Your Move and Reeds Rains.

House prices dipped by 0.2% over the month, taking the annual rate of house price growth to 2.9% – the lowest level since July 2013.

Annually, the average property value in England and Wales rose by £8,433, taking prices to £298,906.

Housing transactions slowed, dropping by an estimated 9% in July on the previous month.

Although there has been a slight slowdown in monthly housing transactions, yearly activity shows that regions such as London and the East of England are continuing to grow strongly.

Every region across England and Wales recorded annual growth, as demand for affordable property continues to rise. Traditionally, lower priced boroughs of London and cities outside of the commuter belt are beginning to see increased activity and transactions from first time buyers.

Every region in the UK still shows annual price growth, however, they all slowed in June. The greatest declines in annual growth were in Wales, down by 1.5% to just 0.2% for the year, the West Midlands, down 1.3% to 3.3%, and Yorkshire and the Humber and the South East, dropping by 1.2% in both to 1.5% and 3.5% respectively.

A slowdown in the South East means that it looks significantly less buoyant than its three neighbours. In the South West, prices rose by 4.2% annually, the East Midlands saw an increase of 4.1%, and the East of England, which continues to lead the way in England and Wales, recorded growth of 5.1%.

Nevertheless, something of the re-emerging north-south divide continues to be apparent, with the North East (1.1%), Yorkshire and the Humber (1.5%), Wales (0.2%) and, to a lesser extent, the North West and West Midlands (both up by 3.3%), recording weaker growth than the southern regions. Greater London, with 2.4% annual growth, remains an exception.

The East of England continues to perform strongly, with all of its unitary authority areas showing solid annual price growth, led by Southend-on-Sea, where values rose by 10.2%, and Luton and Bedfordshire (both up by 8%). The former two, along with Peterborough, also recorded new peak prices in the month.

Aside from Southend-on-Sea, four other areas recorded double-digit growth in prices on an annual basis: Rutland in the East Midlands, with the highest annual increase (12.9%), albeit on low transaction levels; Poole (10.8%) in the South West, which shows strong overall growth, with Bournemouth (9%) also particularly strong; and Pembrokeshire (10.8%) and Blaenau Gwent (10.7%) both bucking the trend in Wales.

Wales also bucks the trend when it comes to housing transactions. Looking at an increase in transaction volumes between the second quarter (Q2) of 2015 and Q2 2017 across all 108 unitary authorities in England and Wales, the top five are all in Wales: Torfaen (28%), Caerphilly (26%), the Isle of Anglesey (26%), Ceredigion (22%) and Wrexham (19%).

House prices in London dropped for the third consecutive month in June, by 1.5% – the second largest drop in over six years – but still remain up by £14,244 on last year.

This decline takes £8,913 off the average property value in the capital, but this still remains double the national average, at £602,849. The trend in London is a mixed picture, with 17 boroughs seeing prices fall last month and the other 16 seeing prices rise.

The top three boroughs in London still show solid annual growth, led by Kensington and Chelsea – the most expensive borough. Average prices in the district are £1,954,735, which is up by 17.3% on last year.

Of the top third most expensive London boroughs, eight saw prices drop last month, including all of the top five. The City of Westminster, with the second highest average property value in the capital, experienced the greatest decline – 11.6% – while the City of London, fifth in the table, saw the second largest – 8.2%. More significantly, the latter also recorded the biggest decrease on an annual basis, with prices down by 17.6%.

At the other end of the market, of the cheapest 11 London boroughs, six saw prices rise in June and only one (Greenwich) has experienced a decline on an annual basis. Just outside the cheapest 11, Lewisham also saw the greatest increase of the month – up by 2.4%. With the average value in Lewisham now £469,709, it was also the only borough during June to record a new peak price.

The Managing Director of Your Move and Reeds Rains, Oliver Blake, comments on the index: “Annual prices are still
 rising positively and regions continue to perform strongly, despite the slowdown in transaction numbers over the summer months.

“Whilst, as a business, we often see this at this time of year, the cause of the dip may also be down to the buy-to-let slowdown as a result of tax changes.”