Local & National House Price Report Round-Up: March 2019
As we reported earlier in the month, it has been an excellent start to the year in the local property market. The number of homes coming onto the market has been at its highest level for 10 years meaning that there are now more properties for sale in Edinburgh and the Lothians, meaning more choice for buyers.
Buyer activity has also been on the rise, but the improvement in supply has eased the pressure on those looking for a home and this has helped to moderate house price inflation.
Elsewhere in the UK the picture has been a little different however. Here’s our regular roundup of the latest local and national house price reports.
ESPC’s latest house price report shows that house price growth in Edinburgh has been ahead of CPI inflation early in the year. It’s worth noting, however, that the rate at which prices are rising is considerably lower than it was early in 2018. In February last year ESPC reported that inflation was 7.7% with annual inflation peaking at 9.0% in May 2018.
The improvement in the supply of homes coming onto the market has been the major factor that has helped to cool inflation. With more properties to choose from there are fewer buyers competing for each property. This has meant that, in general, buyers don’t have to bid quite as much over Home Report valuation to secure their new home.
Commentary from ESPC "From December 2018 to February 2019, the median time to sell across east central Scotland was 27 days, which was five days slower than last year. Within Edinburgh, this figure was 25 days, which was also five days slower than last year. While median selling times have been steadily increasing over the past several months, this is the most significant year-on-year increase that has been seen in recent months. Longer selling times could be a result of an increasing number of properties coming to market in recent months, so buyers are facing less competition than they were previously."
The level of annual inflation reported by Nationwide in February is a little higher than it was last month (0.1%) but still well below the levels being observed in the local market.
Commentary from Nationwide "Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened."
The rate of growth being reported by Halifax is notably higher than that observed by Nationwide and it is worth noting that some commentators have criticised the index for its volatility of late. That notwithstanding, the figures from Halifax still show that growth at the UK level is below that being seen in Edinburgh and the Lothians.
Halifax Commentary "Annual house price growth at 2.8%, is within our expectations, but is fairly subdued compared to 2015 and 2016, when the average growth rate was 8.3%. People are still facing challenges in raising a deposit which means we continue to expect subdued price growth for the time being. However, the number of sales in January was right on the five year average and, at over 100,000 for the fifth consecutive month, the overall resilience of the market is still evident."
Summary Over the last 18 months house prices locally have risen more quickly than in other areas of the UK. This was driven primarily by the shortage of homes for sale in Edinburgh and the Lothians. With the supply of properties having improved recently, house price inflation has started to cool in Edinburgh, though it remains well ahead of the rest of the UK.
As we move forward it is reasonable to expect that inflation locally will cool further and that house price growth in east central Scotland will fall more in line with that seen across the rest of the UK. Heading into 2019 we expected house price inflation in the local market to be between 1 and 2% over the course of the year, and at this stage that remains the most likely scenario.
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