House prices are rising rapidly in the north east of England and falling fast in Kensington and Chelsea, according to property website Rightmove, in a remarkable reversal of the trend over the past decade.
In the London borough of Kensington and Chelsea, the average asking price for a property fell by more than £178,000 to £2.29m during July, a decline of 7.2%. But in the north-east, prices rose by 2.1% over the month, to £147,251. The region recorded the biggest rise in asking prices of any part of the UK. Meanwhile, the south-east, the south-west and West Midlands all recorded price falls in July, said Rightmove, although its monthly regional figures are viewed as volatile.
On an annual basis, asking prices in London notched up the highest gain, rising 7.8% over the year, with Wales recording the biggest fall, down 1.7%. But the overall London figure disguises vastly different results from various boroughs. Areas of the capital seen as unpopular in the past, such as Redbridge, Waltham Forest, Hillingdon and Merton, recorded gains of up to 15% over the year, while prices stagnated in high-price districts such as Islington, Fulham and Richmond.
The average asking price in England and Wales inched ahead slightly during July, hitting a record of £294,542, although this was up only 0.1% on the month before.
In figures that echo a report earlier this month by the Royal Institution of Chartered Surveyors (RICS), Rightmove said there was a sharp drop in the number of homes up for sale.
“The number of properties coming to market is running at a weekly run-rate 10.6% below the same period in 2014. The biggest drop-off in fresh supply is in the typical first-time buyer sector with two bedrooms or fewer. The shortage of suitable property for sale highlights the need for an urgent and marked increase in the overall housing stock to help keep pace with the growth in household formation.”
Rightmove said there is a growing battle between first-time buyers and buy-to-let investors over the dwindling supply of two-bed flats and homes. Trevor Binch of Coventry estate agents Merrick Binch said: “We’re finding that any properties on the market with us at under £150,000 – so your typical two-beds or some three bed terraced – are selling immediately. There are a lot of investors snapping up these types of properties, and this, coupled with the fact that a lot of sellers aren’t coming to market, is making the supply shortage worse. While there are some new developments being built in Coventry, there just isn’t enough to satisfy the demand, especially at the lower end of the market.”
In London, the battle between owner-occupiers and landlords is over properties in the £400,000-£700,000 price range. Donald Collins of Go View London in Ealing, said: “For properties we have on between £400,000 to £700,000, half of the interest comes from residential buyers and half from investors. The fact that investors have a long-term focus of building their portfolio, and in many cases handing it down to their kids, means that these kinds of properties in the right locations won’t come back round on the market for about 15-20 years.”
Earlier this month, RICS reported that the number of homes listed for sale was at its lowest level since records began in 1978, warning that the lack of stock was self-perpetuating as people were put off selling because there was little choice of homes to move to.