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Wage growth outstrips property price rises, as housing market slows

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
18/02/2019

It’s good news for first-time buyers, but sellers may feel less enthused by the subdued housing market, particularly in the south of England

Housing affordability has improved at the fastest rate for eight years, according to Rightmove.

The firm found that the average annual rate of asking price growth at 0.2% (+£714) is outstripped by annual wage growth of 3.4%.

The property portal said that the national average asking price of newly-marketed property rose by 0.7% (+£1,981) in February.

But it’s sellers in the North who are feeling most confident, boasting six of the seven regions that experienced annual price growth in excess of 2%, with Yorkshire & the Humber the highest riser at 3.6%.

Prospective buyers in three of the four southern regions are seeing cheaper asking prices cheaper than a year ago, indicating that buyers have the upper hand over sellers. In London asking prices are down 2.1%.

Sales down

There are some signs of buyer hesitancy with the number of sales agreed in January down 4% on the previous year.

Miles Shipside, Rightmove director, said: “Longer daylight hours and green shoots appearing in gardens herald the start of the traditionally more buoyant spring market.

“Sellers’ subdued pricing is now being outstripped by higher average wage growth, meaning that buyer affordability is on the rise at the fastest rate in nearly eight years.”

Nick Leeming, chairman at Jackson-Stops, added: “As our uncertain market becomes the ‘new normal’ both buyers and sellers are coming to the conclusion that now is as good a time as any to make a move while interest rates remain relatively low.

“There is a limited supply of stock coming to the market currently, so if a property ticks all of the boxes in terms of price, location, access to key amenities and good transport links, we would advise them to really consider purchasing the home.”