UK residential property prices are up by 2% year on year, the highest annual rate of increase seen in the month of November since 2007, according to the latest monthly report from Rightmove.
Even with the effect of prices rising faster in London removed from the picture, prices are still up 0.2% year on year and this means that the market is going into 2013 on a positive note.
New home sellers in the UK dropped their asking prices by 2.6%, the least severe November fall for three years, the Rightmove data also shows. November 2010 saw price falls of 3.2% and the same month last year had price falls of 3.1%.
In the lower price brackets a tightening of supply is pushing up prices on terraces and flats by over 4%.
‘Though the market remains patchy and national statistics are given a gloss by a buoyant London market, there are a number of positive trends that justify cautious optimism as the market enters its’ winter recess,’ said Miles Shipside, director and housing market analyst at Rightmove.
‘Outside the capital, agents report prices are broadly flat in many parts of the country compared to a year ago. This stability may indicate a sounder springboard for 2013 as the wait goes on for a sustainable recovery in transaction numbers,’ he explained.
London continues to buck the trend with an annual increase of 8.8%.
‘There’s a two speed market, with sellers in the capital seeing near double digit price growth in a year whilst the average for everywhere else remains broadly flat,’ said Shipside.
‘However, digging beneath some of the headline regional figures unearths evidence of a second two speed scenario in many local markets, with those that are willing or able to price under the competition selling and moving on, while those that can’t or won’t stay put. Sellers who are lacking momentum in their attempts to attract buyer attention so far this year will be hoping the market steps up a gear in 2013,’ he added.
The monthly report also says that as the traditional winter slowdown approaches, some lead indicators are showing signs of positivity that could suggest a brighter outlook for the year ahead.
These include the fact that search activity on the Rightmove website is up by 20% on the same period last year, as home movers step up their search and research and resulting email enquiries to estate agents and developers in October were up by 11% compared to the same time 12 months ago, delivering more sales opportunities.
Also mortgage approvals were up 9.2% over the last quarter according to the latest Bank of England statistics, suggesting more successful sales completions in the pipeline, and property availability is tightening in lower price bands, with new stock coming to market in the typical first time buyer and investor brackets priced at £150,000 and below down by 5% on a year ago.
‘Terraces and flats have increased in price year on year more than any other property type. With bottom end activity a key driver for the rest of the market, this is an indicator of increased activity amongst investors and first time buyers,’ explained Shipside.
‘In addition, our survey found that 78% of 2013’s intending first time buyers stated that they have a 10% or greater deposit lined up, suggesting they have adjusted to the new market norms of higher equity requirements. While their numbers remain muted, after years of patiently saving they will be hopeful that Funding for Lending, a government backed scheme to improve mortgage availability, helps to catapult them into homeownership next year,’ he added.