The annual price cycle

The seasonal cycle leads to a pickup in prices in spring as new plans are made and foreign buyers start to arrive as visitors.

For many purposes the seasonality is of little interest because even in London the swing from peak to trough is at most 2.5%, a figure which is easily dwarfed by the noise from other sources. It is reported here for several reasons

  • Knowing the pattern and magnitude may help in the decision process as a whole

  • Other commentary in the press is generally not adjusted in a quantitative way and needs to be recalibrated with the cycle in mind.

  • We need to know the seasonal simply in order to eliminate it, because month-to-month it accounts for a lot of the short-term variability and represents systematic noise

  • Press comment this month is mixed but has a significant bullish tone. Some of this is attributable to the seasonal boost, which will turn to swing negative next month so for example West London swings from +40b.p. in June to -25b.p. in September, which in this quiescent market is noticeable.