House prices to recover everywhere except London

UK house prices fell a little during April, the latest survey from the Royal Institution of Chartered Surveyors (RICS) shows, but they are expected to recover across most of the UK in the coming years. Most parts, that is, except for London.

The RICS survey doesn’t share average price information. The way its calculated is to ask its member property surveyors questions on what they’ve experienced regarding property prices during a particular period.

Questions that are asked include:

  • If prices have been rising or falling during the month in the area they work in.
  • Is demand for property higher or lower.
  • Have they noticed an increase in new properties being put up for sale.
  • What is their assessment of future house price changes over different periods of time.

Those details help the body to capture the general activity trend, without focusing on prices.

April RICS survey details

The latest RICS survey covers the month of April and is broadly similar to the March survey.

The April RICS report shows that surveyors, on average, noted that prices fell in April, with the balance of -8, the most negative since November 2012.

However, as with surveys over the past 12 months or so, there were some stark regional divergences. For instance, some regions in Northern England remain popular and price growth is moving higher. But, in the south east and London in particular, house prices are falling.

Specifically, 65% more surveyors reported a fall in house prices across London than those who said house prices rose. That the largest proportion since February 2009.

And, surveyors aren’t expecting any change to that trend in the capital anytime soon.

Some 31% more respondents said they expect the national house price level to rise over the coming 12 months. But, when it comes to London, 20% more surveyors said they anticipate further house price falls as we move forward an into 2019.

“Nearly all areas of the UK show positive twelve month price expectations,” the RICS said. “However, expectations remain downbeat in London.”

While the further decline in house prices in London across April doesn’t come as a surprise – the average price of a property in the city dwarves those in many other regions – the downbeat outlook has remained in place for some time. And, that surveyors’ outlook for the English capital is showing no signs of improving, is something that could worry investors and home-owners in the city, alike.

London house prices

The RICS isn’t the only closely watched housing report highlighting the divergence between London and other regions.

The most up-to-date official data on house prices as calculated and published by the Land Registry and the Office for National Statistics shows that in February, the average UK house price rose 4.4% on the year and slipped by 0.1% on the month, to £225,047.

However, the regional breakdown highlighted that the average price of a London home was £471,986, some 2.1% lower in February than in January. Only Scotland recorded a larger monthly decline of 2.7%.

Meanwhile, the annual figures were even more stark – the only region where the average price of residential property was lower in February 2018 compared with February 2017, was London where prices declined 1%.

The data showed the highest year-on-year price rise was of 7.3% in the west Midlands. The Land Registry calculated the average property price in the West Midlands at £192,648, a 2.2% increase from January. Only prices in the north east of England rose more sharply in February from January, by 3.1% to £128,218.

The data from numerous sources concur that London property prices aren’t faring as well as elsewhere. And, while market watchers are loathe to make predictions, it does look as though any recovery the capital could lag other regions, too.