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House Price Reports
House prices slow dramatically in May - Rightmove
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Miles Shipside of Rightmove did warn that last months' figures were 'freakish' - the 3.6% rise in house prices for April did seem rather out of step with sentiment when considering the other data available. However, most housing market commentators could not have expected house prices to find a reverse gear so quickly, particularly in light of the fact that Rightmove are also reporting a record number of new properties advertised on their website in May, which should have inflated prices not deflated them so dramatically...
U.K. house prices rose at their slowest monthly pace so far this year during May, suggesting recent interest rate hikes are finally beginning to cool the housing market, figures released Monday by online estate agency Rightmove showed.
According to its latest index, house prices in mid-May rose 0.4% on the month and were 13.1% higher on the year. That marked a sharp slowdown from the 3.6% monthly and 15.0% annual rates of increase reported in April.
The Bank of England has raised interest rates four times since August, most recently in May when it hiked rates 25 basis points to a six-year high of 5.5%.
Rightmove said the May rise in prices:
"Represents a major slowdown on the previous month. These are signs that the rising interest rate environment may finally be influencing sellers' pricing decisions."
Rightmove also reported that the number of new properties advertised for sale on its Web site totaled 200,115 in the four weeks to mid-May, which was the highest ever number of newly advertised properties on record, and surpassing the previous high of 178,158 reported in June last year.
The high number of new sellers - which has seen the average number of properties for sale per estate agent rise to 61 in May from 59 in April - was probably due to the imminent introduction of Home Information Packs. HIPs will be compulsory from June 1 and will cost each seller a few hundred pounds, on top of other existing home selling fees, and it is this extra cost that sellers are avoiding by marketing their properties for sale before the deadline.
Miles Shipside, Rightmove's commercial director:
"Its all rather confusing at the moment, the future direction of the housing market is very hard to read with two external influences likely to coincide at once. You have the potential of HIPs artificially increasing the supply of property and, within the same month, a six-year high in interest rates potentially depressing the number of buyers."
Shipside added, however, that while house prices could begin to stagnate in the coming months, outright price falls are unlikely "without a substantial increase in forced sales, usually associated with serious growth in unemployment and an even higher growth than the recent hikes in interest rates."
Rightmove measured 200,115 asking prices of properties put on sale by estate agents between April 8 and May 12.
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