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House prices fall in South East England for first time since 2011
Property asking prices climbed to a new record high this month, but prices fell across south-east England for the first time since in seven years.
Prices of property freshly put on the market rose 0.8% month-on-month in May to a new record high of £308,075, according to research from Rightmove, up from £305,732 in April.
However, while seven out of 11 regions achieved their highest ever asking prices, those in London subsided 0.2% on last year and across the South East as a whole dropped 0.1% - the first fall since 2011.
The number of sales agreed by estate agents so far in 2018 is down 8.5% year-on-year in the South East and 6.9% in Greater London. Across the country, the number of sales agreed is down 5.4% on the same period in 2017.
Miles Shipside, Rightmove director, said "After six years of continual year-on-year price growth the current market is becoming increasingly price-sensitive, with new-to-the-market sellers being limited to an average asking price growth of just 1.1% over the last year.
"This is in spite of there being plenty of historically cheap mortgage products around for buyers who meet lenders' criteria. Sellers need to pitch their price at a tempting level to entice buyers, as while there are signs of strong demand there appears to be hesitation among some buyers to commit."
Regions enjoying the best conditions were the East and West Midlands, with house prices up 4.8% and 4.3% respectively and Wales, up 4.3%, while all other regions except London and the South East also remain positive year-on-year.
With the South East going into reverse, Shipside said this indicated that the softening in the London market is now spreading to its commuter belt amid signs that Inner London may be closer to a price recovery.
"While this gives buyers in the South East the opportunity to negotiate prices down, in some of the more buoyant areas of the country the options to do so are more limited by a shortage of suitable properties on the market."
Russell Quirk, CEO of Emoov.co.uk, noted a reduction in the number of sales agreed, which he said was through a "lack of commitment".
"This is hardly surprising when you consider the reality gap between the expectations of stubborn sellers and the current market climate. While actual price growth is remaining somewhat static, over-optimism on the side of UK home sellers is continuing to push asking prices ever higher.
"This is becoming a big problem and the widening gap between asking price and sold price will only result in a further decline in buyer interest and a continued market slowdown."
LONDON PRIME CENTRAL
Research based on Land Registry data also out on Monday showed London prime central property prices fell back for the second consecutive month in March, following the all-time high in January. The research, by London Prime Central, noted just 975 transactions in the first quarter of the year, the lowest level since additional rate stamp duty was introduced in 2016 but that average prices remained above the £2m mark in March for the fourth consecutive month.
New build transactions in London PC fell 14.9% year on year and the price differential between new and old stock was 41.7%.
Naomi Heaton, CEO of LCP, said prices staying above the £2m mark was largely due to the sale of 14 flats in the Holland Park Villas development between £10-33m each, since November of last year.
"The wait and see attitude of both investors and property owners continues throughout the PCL market. There is therefore very limited stock available and most current vendors need to sell. Consequently, there are some very good opportunities for the few buyers in the market.
"It is not anticipated there will be further tax changes in the residential sector given the worrying fall in transactions impacting on treasury revenues. A period of stability will be good news for investors and may help improve market sentiment."