Houseprice Index claims record asking prices reached in May, but agents reject inaccurate picture of the market
PUBLISHED: 19:02 23 May 2017 | UPDATED: 19:02 23 May 2017
Camden house prices are apparently up almost 8 per cent, but local agents have dismissed Rightmove’s data as having little bearing on the reality of the plateauing property market in north London
The average price of a property in May 2017 was £1,090,515, up 7.7 per cent on April 2017, according to the latest Rightmove House Price Index. The borough still has the third highest asking prices in the UK after Kensington and Chelsea and the City of Westminster. Prices were down 0.8 per cent year on year.
In neighbouring Islington, 3.8 per cent increases made for an average of £798,379, while Haringey fell -0.4% to £669,540. House prices in Barnet recorded the highest annual change of 10 per cent, up from £670,654 to £737,881.
Across London, new sellers are up by 4 per cent month on month in stark contrast to the standstill happening across the country as a whole. Prices have risen 2.1 per cent to just short of £650,000 this month, with annual growth rates in inner and outer London marginal at 0.6 and 1.2 per cent respectively.
For the fifth consecutive month, asking prices have risen by 1.2 per cent in May to a record national average of £317,281 according to Rightmove’s latest House Price Index. The rise is equivalent to a £3,626 price hike, beating the previous record by £92.
However, the latest seasonally adjusted residential property transaction figures from HMRC showed a 3.2 per cent decrease between March and April 2017, painting an uneasy picture of the stability of the housing market.
Local estate agents are unconvinced by the data produced by Rightmove. One agent refused to even comment on the latest figures because they felt them to be so misrepresentative.
Viv Harris, owner and managing director of Heathgate Properties in NW3 argued that the index is an innacurate measure of the current market.
“I do not agree that Rightmove’s House Price Index is correct,” she said.
“Due to stamp duty, Brexit and the election coming up there is too much uncertainty and I would say if anything there have been price reductions rather than price increases, certainly within the north west London and central London bands.
“Property moves in ladders. So if the bottom rung can’t move to the second rung, and the second rung can’t move to the third rung, and the third rung can’t move to the fourth, the whole thing comes to a standstill. I would say that the market has in fact plateaued.”
Although sellers seem to still be asking for higher prices, there are a number of high-end properties slicing the top off their asking price to avoid sitting on the market for months.
Comparing like for like with 2016 is unrepresentative of a normal year, thanks to the buying rush spurred on by a 3 per cent levy on second homes and plans to restrict Buy-to-Let mortgages on April 1st.
“They are not seasonally adjusted,” said Ms Harris of Rightmove’s figures. “At different times of the year you have more activity or less, and last year there was a huge amount of activity leading up to the 1st April because everybody tried to get in before the extra stamp duty levy came in. So what they really need to be doing is looking at the market since 1st April 2016, not prior to it.”
March 2016 had the highest transaction figures in the last decade, and the number of non-adjusted residential transactions in April 2017 was 12.8 per cent higher than in April the previous year.
Provisional figures released today by HMRC show that the number of seasonally adjusted UK residential property transactions in April this year was 99,910, representing an estimated decrease of 3.2 per cent between March and April 2017, or a 22.5 per cent decrease in non-adjusted terms.
One thing both Rightmove and the high street agents can agree on is that homeowners are reluctant to adjust their price expectations despite homes not selling quickly.
The average time to sell has fallen from a high of 71 days in January 2017 to 53 days in April. Although sellers might not make good on their asking prices, founder and CEO of eMoov.co.uk, Russell Quirk said:
“UK buyers are still sitting tight despite a marginal cool in market demand and are yet to reduce their price expectations. Overall, the predominant air of confidence seen in the market over the last year from UK home sellers seems to be persisting and this, in turn, should see price growth stabilise.”
Mr Shipside added: “Demand is exceeding supply in many parts of the country and continues to push up the prices of newly-marketed homes. Spring is in the air and home movers are springing up the housing ladder.”
Local agents remained unmoved by the asking price hype.
“It’s sale prices that matter,” saidMs Harris. “You can ask what you like, it doesn’t mean you’re going to achieve it.”