Righmove House Prince Index – August 2017 Update
Mid-country hot-spots enjoy mini-boom in annual price growth
Holiday season casts its usual shadow with price of property coming to market falling by 0.9% (-£2,758) this month
Climate of stretched affordability and clouded political outlook continue to chill the annual rate of increase to a national average of just +3.1%
Of the English counties exceeding the 3.1% average annual rise, over half are in the buoyant mid-regions of the country in contrast to only a quarter in the north and just a fifth in the south
Eight counties are enjoying a mini-boom, with year-on-year rises of over twice the pace of the national average, and they are all in the middle band of the country
Top three hottest markets: Northamptonshire (+9.1%), Derbyshire (+7.9%) and Norfolk (+7.4%)
The price of property coming to market has fallen by 0.9% (-£2,758) this month. A price fall when the summer holiday season is in full swing is not unexpected, with both buyers and sellers having holiday distractions. Indeed, this drop is very much in line with the average for this time of year, which has been -1.2% over the seven years since 2010. The market faces some well-documented headwinds however, and this continues to be reflected in the subdued annual rate of increase of just +3.1%. In spite of the blustery outlook, there are still many price hotspots bucking the slowing trend. Rightmove research at a county level reveals that rather than a north/south divide, it is the middle band of England that is overwhelmingly out-performing the rest of the country.
Miles Shipside, Rightmove director and housing market analyst comments: “With newly-marketed property seeing a monthly fall of 0.9% and a muted yearly rise of just 3.1%, the heat has come off much of the market. A combination of traditional summertime price blues and the chill of uncertainty in the air has cooled price growth in some parts of the country, and affordability also remains very stretched. But despite these factors, high demand and limited supply are still driving momentum, especially in the counties in the middle of the country. Here, year-on-year rises at over twice the pace of the national average are widespread, in contrast to southern and northern counties where none have approached these heady heights.”
Of the English counties that are out-performing the 3.1% national average annual rate, over half are in the mid-regions of the country. This is in contrast to only a quarter in the north and just a fifth in the south. Of all the counties in England, 22 are seeing more muted price rises of below the national average of 3.1%. Of those above the benchmark, only six are in counties that form part of the northerly regions, and a mere five in southerly regions.
Shipside advises: “With a shortage of suitable choice in many parts of the country, buyers are becoming increasingly adept at hunting down property that fits their budget, ticks the boxes on their checklist and stirs their emotions. Properties in the counties that have seen above-average price rises over the last year are clearly meeting the needs of home-hunters at relatively affordable prices. Conversely sellers in the counties performing below par are having to ask for lower prices in order to sharpen up the appeal of their properties. Wherever sellers happen to be, they must not forget that buyer affordability has become increasingly stretched, and in this environment if you ask too much at the outset you are likely to lessen the chances of a successful sale.”
The top eight county hot-spots, with price increases more than double the national average when compared to a year ago, are all in the middle band of the country. They are Leicestershire (+6.9%), West Midlands (+6.9%), Worcestershire (+7.0%), Bedfordshire (+7.0%), Nottinghamshire (+7.1%), Norfolk (+7.4%), Derbyshire (+7.9%) and Northamptonshire (+9.1%). The best performers in the north are Merseyside (+5.6%), East Riding of Yorkshire (+5.4%) and Cheshire (+5.3%), while the south’s less impressive trend-buckers are Kent (+5.0%), Somerset (+3.8%) and Bristol (+3.6%).
Shipside concludes: “The top three price hot-spots in the country, leading the mini-boom across the middle of England, are the counties of Norfolk, Derbyshire and Northamptonshire. Norfolk in third place has a popular holiday and retirement homes market which is perhaps providing better value for those still active in this sector than parts of the south coast, plus its county town is the fast-growing Norwich. Derbyshire in second position does well in the affordability stakes, being the cheapest of the top three and third cheapest out of the top eight with average prices around £200,000. The country’s top hot-spot is Northamptonshire, aided by its commutability to London and affordability compared to counties closer to the capital.”
Adam Wellesley, Director of Horts Estate Agents in Northamptonshire, comments: “The annual growth running at three times the national average in Northamptonshire is likely to be down to the close vicinity for commuters to get to London Euston, as you can now get there within 48 minutes. You can also get to Milton Keynes by train in ten minutes where prices are 20% higher than Northampton. The buy-to let market and commuter market has stayed reasonably buoyant. Investors are still managing to find a 5% return on property and up to 10% for HMOs (house of multiple occupancy).”
Luke St Clair, Director of Knightsbridge Estate Agents in Leicestershire, comments: “We’re experiencing house price growth beyond the national average at present in the towns just outside of Leicester City Centre, where some areas are close to double digits such as LE18 (Wigston), LE2 4 & LE2 5 (Oadby). It’s easy to see why due to the recent investment into schooling and the local community for leisure facilities that has taken place. It doesn’t stop here, rural village locations are also benefitting where we are also seeing above average increases in South-Leicestershire.”
Kevin Shaw, national sales director at estate agents Leaders, comments: “These figures, which are backed up by our own findings, clearly demonstrate the resilience of the housing market after last year’s historic Brexit vote. With the London market now well beyond the reach of many buyers, we have seen a definite ripple effect to these more affordable regions, which have good transport links to either London or other large cities and towns, and which benefit from various infrastructure initiatives – such as HS2 and other transport and urban regeneration projects. Birmingham is a notable hotspot, rivalling Manchester for second city status. Most crucially, unlike London and the South East, house prices are within the reach of first-time buyers. Demand for rented property in these areas is also exceptionally high, enticing buy-to-let investors looking for inexpensive opportunities to invest. All these factors have driven demand and above average price increases over the last twelve months.”
Copyright Righmove 2017 - Courtesy of Rightmove Group.