House price declines have spread across more UK regions, in the face of rising supply and falling demand, according to the August Asking Price Index from home.co.uk.
On average, house prices in England and Wales fell by 0.3% in the month. The largest monthly declines were recorded in London and the South East (both 0.6%).
The North West, West Midlands and Scotland were the only regions to record positive house price growth.
Rising supply has led to market saturation in the East of England, and this region looks set to join London and the South East in negative annual growth before the end of the year, home.co.uk reports. The same pattern of a supply-induced slowdown, combined with a pullback in demand, is now affecting the East Midlands and the South West, which is exerting downward pressure on prices.
The West Midlands and North West look like the next regions to be similarly affected, as the negative sentiment that originally emanated from London and, later, the South East, spreads north and west. Consequently, overall annual house price growth is trending to zero and stock levels are trending up.
home.co.uk believes that London and the South East’s woes are far from over, as the two regions suffered the largest price declines over the past month. Asking prices in the capital have been slowly falling for 26 months and, thus far, the only solace is that the latest figures suggest that, perhaps, supply has stopped rising.
Meanwhile, northern property markets continue to perform strongly, as does Wales, which is leading price growth ahead of the West Midlands. These regions – several years later in the cycle than London – are still showing significant market activity, and low or falling time-on-market figures. Although, as mentioned earlier, slowdowns appear imminent in the West Midlands and North West.
The typical time-on-market continues to rise annually in London (10%), the South East (9%) and East of England (14%). Overall, the average time-on-market for England and Wales has increased to 84 days – the same as in August 2017.
Overall supply of properties for sale in the UK has risen by 4%, while the total stock for sale has increased by 10.3% year-on-year.
In August 2017, the annual rate of house price growth stood at an average of 3.3%; today, it is just 1.1%.