Home Asking Price Index, May 2014: London property bubble confirmed
London asking prices rose 20.8% annually and 2.4% monthly, while England and Wales prices increased 9.2% annually, as typical marketing time fell to 90 days.
This is the May 2014 edition of the Home Asking Price Index, released on 14 May 2014, under the headline:
London Property Bubble Confirmed
The headlines and summary below are the report's own words, with the key figures as it published them, followed by the report's charts and regional tables as printed.
Headlines
- Home prices in Greater London leapt a further 2.4% over the last month, bringing the annual rise to an alarming 20.8%
- Home prices accelerate, bringing the average annual appreciation for England and Wales to 9.2%
- Typical time on market drops further to 90 days as the regional markets slowly heat up
- Supply of properties for sale entering the market: down
Summary
The rate of ascent of the national average home price continues to rise at a breathtaking pace. However, much more worrying is the rate of price rises in the Greater London region. Prices in and around the capital have soared an unhealthy 20.8% over the last year. History tells us that, during a UK property boom, London leads the other regional markets by one to two years. Moreover, it also tells us that when prices rise too fast (ahead of inflation and wage rises), the housing market becomes unstable and eventually collapses. Government initiatives stoking demand coupled with unprecedented low supply continue to drive prices inexorably higher. The national annual rate of increase, currently 9.2%, is now considerably higher than during the last property boom as measured by this index, and around 7% higher than inflation. Overall supply of properties entering the sales market continues to fall: down 6% across the UK over the last year. The regional market of East Anglia contracted most over the last 12 months, by 21%, in terms of the number of sales properties entering the market.
Key figures
| Measure | Figure |
|---|---|
| Average Asking Price (England & Wales) | £260,609 |
| Monthly change (England & Wales) | 1.4% |
| Annual change (England & Wales) | 9.2% |
| Typical Time on Market (England & Wales) | 90 days |
| Annual change in supply (UK) | -6% |
| Fall in supply entering market since April 2008 | 50% |
| Current stock for sale vs six years ago | 54% |
| Properties entering market, April 2014 | 98,000 |
Figures are for England and Wales unless the report states otherwise, as published in the edition.
Charts from the report
Source: Home.co.uk, May 2014
Source: Home.co.uk, May 2014
Source: Home.co.uk, May 2014
Source: Home.co.uk, May 2014
Source: Home.co.uk, May 2014
Regional tables
UK Asking Prices, May-14
| Region | Average Asking Price | Monthly % change | Annual % change |
|---|---|---|---|
| Scotland | £162,191 | 1.0% | 0.0% |
| North East | £154,456 | 2.2% | 19.5% |
| Yorks & The Humber | £171,204 | 0.7% | 0.9% |
| England & Wales | £260,609 | 1.4% | 9.2% |
| North West | £177,324 | 0.7% | 2.6% |
| West Midlands | £201,448 | 1.2% | 4.9% |
| East Midlands | £187,128 | 0.1% | 5.1% |
| East | £272,828 | 0.7% | 7.5% |
| Wales | £179,435 | 0.3% | 2.4% |
| Greater London | £454,034 | 2.4% | 20.8% |
| South East | £338,852 | 2.0% | 10.6% |
| South West | £277,684 | 1.5% | 6.4% |
From the director's commentary
"The UK property market remains highly diverse in respect of marketing times. London seems a world away from the difficult and slow markets in the North."
Doug Shephard, director at Home.co.uk
Read the full May 2014 edition (PDF, 6 pages)
About the Home Asking Price Index
The Home Asking Price Index measures the change in the prices sellers ask for residential property across England, Wales and Scotland. Today it is computed every month from around half a million advertised homes and is mix-adjusted, so a change in what happens to be on the market does not move the figure; earlier editions state the sample they were built from. Because an asking price is set months before a sale completes, the index runs around five months ahead of completed-sale measures such as the UK House Price Index.
Every edition in the archive, back to October 2006, is listed on the index page. How we measure the UK property market explains the listing data behind it, and today's figures by area are on house prices and rental prices.
Text and figures above are quoted from the May 2014 edition as published, with punctuation normalised for the web, and are not revised. Later editions may restate them.
More in What is happening to house prices: the Home guide
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