Average house prices surge across the North and West Midlands

The current level of demand for homes is likely unsustainable due to the looming changes to Stamp Duty

Despite negative economic news regarding the wider UK economy, the UK property market retains significant optimism, according to newly released figures from Home.co.uk

The flow rate of properties moving through the sales market is relatively high, thanks to substantial demand. Rising asking prices during the last month were supported by seasonal optimism and a moderation in supply following the surge in new instructions seen in January.

Notably, pricing continues to be strongest in the northern regions and weakest in London and adjacent regions. Rental yields are undeniably a key driver of regional growth disparity, directing investment away from arguably overvalued locations predominantly in the South towards the northern regions.

Overall, the vital signs of the UK property sales market indicate a positive state of health, due mainly to continued demand in the North.

However, vendors and agents alike understand that the current level of demand is unlikely to be sustained after the increase in stamp duty on April 1st. By how much buyer appetite is quenched is anyone's guess. Should demand fall significantly, the latter part of the year will be a miserable experience for the UK property market, given the vast amount of inventory already on the market.

Yorkshire remains the regional growth leader with the mix-adjusted average asking price now an impressive 5.4% higher than a year ago, while the South East shows a paltry 0.3% growth, just ahead of the East of England at 0.4%.

Rental market

UK annualised asking rent growth falls back to 1.3% overall, which is well below inflation. However, the national average continues to be dragged down by the very large Greater London lettings market where asking rents continue their steady overall decline. The East Midlands remains the best-performing region, indicating rental growth of 9.2% year-on-year.

The annualised mix-adjusted average asking price growth (sales) across England and Wales is now 1.9%; in March 2024, the annualised growth of home prices was 0.1%.

Via @PropertyReporter