The East Midlands saw the biggest increases from January, as prices rose by an average of 5.8% (£9,651), with Derbyshire showing the biggest average monthly rise by county of 3.0% (£5,310).
High Peak and Melton Mowbray saw the highest increases of the month in the region, with average house prices increasing by 3.5% (£8,301 and £7,973 respectively), taking the average house price in High Peak to £245,932, and in Melton Mowbray to £234,360.
Burton-on-Trent and Peterborough also cited healthy increases, with average prices in Burton-on-Trent rising from £182,205 to £186,352 (2.3%), and Peterborough prices rising from £181,594 to £185,389 (2.1%).
The rest of the East Midlands fared well with only a few reporting falls in the previous month’s prices. Loughborough reported the biggest fall this month at 2.6%, taking average prices from £200,094 to £194,833 (-£5,261).
Grimsby and Grantham also reported falls, at 1.5% and 1.0% correspondingly, as did Spalding (0.7%) and Worksop (0.2%)
Overview
Optimism remains robust amongst the fewer sellers who came to the market over the last month. The lowest February level of new listings since 2005 saw average asking prices jump by 3.2%, (£7,426). It is traditional for asking prices to be driven upwards at this time of year, with fresh sellers tempted to test the market at a higher price as they have fewer timescale pressures with the year ahead of them.
There is still some distortion in the housing market from the December deadline for Home Information Packs for properties with two or fewer bedrooms. The lower level of February listings compared to previous years could be partly due to the slower market, but also some speculative sellers may be put off by the additional costs involved in preparing a HIP. We predicted that a lower supply of property post HIPs implementation could underpin prices, and the larger than usual February bounce could be evidence of that. In addition, the size of the average price rise has been exaggerated by more expensive three and four bedroom properties making up a larger proportion of the mix, following the rush of cheaper one and two bedroom properties to the market in December. Without the HIP effect, average rises in asking price would have been between 1.5 and 2%, more in line with the traditional February bounce.
The 3.2% gain for February counterbalances the 3.2% fall we reported in December, as the cheaper smaller properties beat their deadline. We saw a similar pattern around the HIP deadline for three bedroom properties, with a 2.6% fall in September reversed by a 2.7% increase in October. If we look at the entire period from June 2007, before the introduction of HIPs, to February 2008, we see an overall decrease of just 0.6%. This indicates that for the past eight months prices have on average been virtually static, a flat trend that we have already forecast will continue for the rest of 2008.
