As we reported in our latest Market Report, the local property market is continuing to suffer from a lack of properties coming onto the market. As a result, demand is exceeding supply meaning that most properties are selling quickly and for more than their Home Report valuation.
It’s a different story in other areas the UK however, as we can see in this month’s round-up of the latest major property market reports from around the country.
ESPC House Price Report – April 2018
Average House Price (Edinburgh): £256,093, up 8.8% annually
It’s not surprising to see that the trends being observed in ESPC’s latest House Price Report are in line with those in the Warners’ market report. House prices are rising and properties are selling quickly. ESPC observed that 75.7% of properties sold during the three months to April achieved or exceeded their Home Report valuation, up from 70.5% last year.
90% of homes are now being listed at Offers Over, up from 82% a year ago reflecting sellers’ confidence in market conditions.
Like ourselves, ESPC highlighted a shortage of supply as the main factor driving the market. The number of new homes being brought to the market between February and April was 8.3% lower than it was during the same period in 2017.
Registers of Scotland House Price Index – February 2018
Average House Price (Edinburgh): £250,986, up 11.2% annually
Average House Price (Scotland): £144,377, up 6.2% annually
Registers of Scotland’s latest house price index reveals that property prices are continuing to rise sharply in most areas of Scotland. 28 of 32 local authority areas recorded an annual increase in house prices, with the average house price across Scotland rising by 6.2% overall.
House prices in Edinburgh rose almost twice as quickly as they did across Scotland, an 11.2% increase bringing the latest average in the Capital to £250,986.
Halifax House Price Index – April 2018
Average House Price (UK): £220,962, up 2.2% annually
Across the UK we can see that house price growth is much more subdued. Halifax reported that house prices in April rose by 2.2% annually. That marked a cooling in the annual rate of growth from 2.7% in March.
Halifax noted that whilst the supply of new homes to the market is limited – just as it is in Scotland – across other areas of the UK demand is also muted, resulting in the far lower rates of house price growth.
Russell Galley, Managing Director with Halifax observed: “Housing demand has softened in the early months of 2018, with both mortgage approvals and completed home sales edging down. Housing supply – as measured by the stock of homes for sale and new instructions – is also still very low. However, the UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range 0-3% this year.”
Nationwide House Price Index – April 2018
Average House Price (UK): £213,000, up 2.6% annually
Nationwide’s April report largely echoes the findings of the Halifax House Price Index. House prices were found to have risen by 2.6% annually and, while this marked an increase from the rate of 2.1% in March, it is still substantially below the sort of figures that we are seeing in the local property market.
Looking forward Nationwide stated that they expect UK house prices to increase by just 1% over the curse of the year.
Overall, it is very much a case of “as you were” for both the local and UK housing market. Locally, supply is failing to keep pace with demand and as a result prices are rising quickly.
At the UK level however, demand is much more subdued. As a result house prices are rising at a much slower rate and indeed in some areas house prices are lower than they were a year ago.
As the year progresses we still expect that we will start to see the local market cooling somewhat. The trends that we have seen south of the border will inevitably have a knock-on effect for the local market and more importantly, the levels of house price growth that we have seen lately in the local housing market are not sustainable over the longer term. As a result it is reasonable to assume that house price inflation in Edinburgh will fall back towards the 3% level by the end of 2018.