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Housing prices not recovered in real terms
Published October 17th, 2017
House prices in most areas of England and Wales have not yet recovered from the housing crash.
According to data gathered by the BBC and the Open Data Institute (ODI) Leeds, residential properties in 58 per cent of wards are selling for less now taking into account inflation than they were 10 years ago.
Average house prices in Wales, Yorkshire, Humber the North East and North West have declined by more than 10 per cent when adjusted for inflation. Only the South East and East of England have seen prices increase.
Although most regions have seen house prices go up, this has not been as fast as the rate at which prices in the rest of the economy have risen.
The BBC data team and the Open Data Institute (ODI) Leeds analysed more than eight million residential property transactions in England and Wales from the Land Registry database for the period from 2007 to July this year
The latest market survey from RICS also show an increasingly mixed picture across the UK housing market. According to the August 2017, UK Residential Market Survey National sales have not seen any growth since November 2016.
Going forward, although headline price expectations remain subdued over the next three months, at the 12-month horizon, prime central London remains the only area in which prices expectations are negative.
August saw little change at the national level to buyer enquiries with the broadly flat trend extending into its ninth straight month. Agreed sales also showed little change with 4% more respondents seeing a fall rather than rise.
Supply also continues to be an issue with 1% more respondents seeing a fall in new sales instructions at the national level. Although this has now turned less negative three months in a row, following such a sustained period of deteriorating sales instructions average stock levels on agents’ books are still near an all-time low.
The August survey contained an additional question to ascertain whether respondents, in the light of policy changes, felt more landlords would enter or exit the market going forward. Nationally, 61% felt landlords would exit the market over the coming year, while only 12% felt there would be a greater number of entrants. Moreover, for the next three years, 52% felt there would be a net reduction in landlords, with only 17% suggesting a rise.
Given the likely resulting supply and demand mismatch in this area, respondents predict that over the next five years rental growth will outpace that of house prices, averaging 3%, per annum (against 2% for house price inflation).