Mixed messages abound, but there are fewer reasons to be negative about the housing market. October 2018 Monthly Update
In the last month we’ve continued to see some more evidence that the property market is coming back to life (or at least not getting worse). The RICS survey this month is entitled “Prices continue to rise in much of the UK” (hooray!) but Nationwide tell us about “Slowing in annual house price growth in August” (boo!). However, Nationwide go on to say that the small variations involved suggest “little change in the balance between demand and supply in the market.” So I think it’s fair to say things are holding steady. The Governor of the Bank of England has warned that a no deal Brexit could seriously damage house prices, but barring economic catastrophe it seems most likely that the market will just keep plodding along.
– The Nationwide index –
The Nationwide building society has a lot of data on the housing market because of all the mortgages they sell. That’s why everyone interested in the housing market pricks up their ears when their monthly index comes out. You can read the full thing here, but here is our summary.
The Nationwide index reports that annual house price inflation across the UK stood at 2 per cent in August 2018, compared with 2.5 per cent last month. The overall average price of a home in the UK now sits at £214,745, which means prices have risen by a total of 186.1 per cent since 2000 (equivalent to £7,500 per year).
Looking just to the last month, prices are down 0.5 per cent on a seasonally adjusted basis. To put that in context, the average monthly change over the last 12 months was a rise of 0.2 per cent, so the latest performance is slightly weaker than in recent times. Even though Nationwide’s figures are seasonally adjusted, it’s best not to draw too many conclusions from monthly data.
Chart 1: Annual house price change (Nationwide)
Chart 2: Monthly house price change (Nationwide)
Chart 3: Overall average prices (Nationwide)
Regional annual house price change – June 17 vs June 18 (Land Registry)
– RICS word cloud –
Each month the RICS publishes a fantastic survey where it asks agents and surveyors what they think is happening in their local area. Here we’ve turned their comments into a word cloud where the size of each word represents how often its used in the survey. The idea is that you can get a quick glimpse into how the people on the ground are feeling about the housing market.
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