What the latest Property Price headlines are saying

Whilst some believe the British are obsessed with talking about the weather, if you pick up the daily newspapers or switch on the news, there seems to be a similar obsession with house prices.

With more than half a dozen different indices which analyse market trends each month, there is no shortage of commentators attempting to make sense of what is happening with house prices and changes to monthly rental payments:

  • Rightmove and Zoopla draw conclusions from homes which have been listed on their own property portals – however as these are merely asking prices, they don’t necessarily reflect the amount the properties are eventually sold for (if indeed the property is even sold at all!)
  • RICS (Royal Institute of Chartered Surveyors) produces an in-depth report with commentary, however this is limited to data provided by its own surveyors
  • Mortgage data analysed by both Halifax and Nationwide is based on approved mortgage applications, but doesn’t take account of cash purchases
  • HomeLet analyses rental data received as a result of the referencing prospective tenants on behalf of letting agents and landlords across the UK
  • Meanwhile the Land Registry is one of the sources of data which goes into the Office for National Statistics (ONS) report; although the ONS has yet to find a reliable source of rental price changes which is why the quarterly report is described as ‘experimental’

The Halifax House price figures were met with some controversy this month – as analysts appear to cast doubt over the quality of the figures after a suggestion that prices had risen by 5.2% in the three months to May, when compared to the previous three years.

This isn’t quite as high an increase as other indices suggested, including Nationwide which reported house price growth at half this rate.

Some analysts suggest the reason for the discrepancy across the figures could be that Nationwide is stronger in the south where house prices are more challenged; whereas the Halifax has a stronger presence in the north.

Meanwhile, our own data suggests that pent-up demand could be pushing prices up. Figures from our estate agency branches show that both rents and house prices are on the rise – with the number of buyers up by 5.4% versus this time last year – whilst stock is down by around 3%.

Our Chief Executive Officer, Paul Smith commentedThe sluggish home movers’ market is, in turn, boosting competition of rental stock and pushing up returns for landlords. The number of tenants registering has jumped up 34% on the year in London – so there are now 14 aspiring tenants registering for every buy to let property listed. Which in turn has pushed up rental prices by 6% on the year.”

This data suggests landlords are in a positive position. There is strong demand for private rental homes, which in turn appears to be driving up rental prices.