New figures released from haart estate agents has showed that transactions, viewings and registrations all slipped during October.
The report reveals that property prices rose by 0.5% month-on-month and by 1.5%, taking the average UK house price to £227,566.
Dropping demand
Buyer demand for homes dropped by 2% in September and is down substantially by 22.4% year-on-year. What’s more, the number of properties coming onto the market has dropped 5.3% month-on-month and by 6.1% year-on-year.
As such, the decrease in stock has led to the number of buyers chasing an instruction to rise slightly. There are now nine potential purchasers for every new property coming onto the market.
In addition, the market has become less efficient in the last month, with the number of transactions decreasing and viewings rising.
Market ups and downs
The typical purchase price for first-time buyers has increased by 2.8%, up year-on-year by 5.6%. However, the number of first-time buyers entering the market dropped by 1.5% month-on-month and by 30.1% annually.
In terms of tenants, the numbers entering the market fell by 2.6% and by 13.4% annually. This pushed down rents marginally, with the average rent now £1,385 in the whole of the UK. In London, demand has risen by 6.8% month-on-month, but is still down year-on-year. Average rents in the capital are £1,961.
Investors taking out landlord insurance on properties have increased over the last month, with numbers registering to buy rising by 5.4% month-on-month across Britain. Despite that increase in demand, sales prices have fallen, by 3.5% over the month and by 9% in London.
Transactions increased by 28.6% across the UK over the course of the year.
Shortage in property pushing up prices
Confusion
Paul Smith, CEO of haart estate agents, noted: ‘The nation’s property market is suffering from the ongoing confusion around Brexit and what it will mean for our economy. Homeowners are experiencing a crisis of confidence, with sellers either holding out for better offers or keeping their properties off the market altogether. A Brexit courtroom drama has hardly helped the situation. The Government must set out a clear plan for Brexit to help buyers and sellers feel confident and to get housebuilders building again.’[1]
‘In London, which voted heavily in favour of Remain, the problem is particularly acute, with the number of new properties on the market down by over 10% on last month, and transactions down by over 20% on last year. The current supply shortage has seen a jump in London prices compared to last month, but unlike normal times this isn’t a sign of a ‘hot’, active market. It is a blip undermined by the fall in transactions – in reality nobody is winning in the current market. The ‘Psychology of Brexit’ is holding the market back, and the government must act to avoid this dip becoming a long-term problem,’ he continued.[1]
Concluding, Mr Smith said: ‘The Autumn Statement is the Government’s opportunity to relieve the pressure. Philip Hammond must look to cut stamp duty, especially at the bottom end to help ‘generation rent’ make their move onto the property ladder, which will increase fluidity in the market. We also need to see new incentives to ensure housebuilders continue with planned projects and increase their pipelines to get Britain building again.’[1]
[1] http://www.propertyreporter.co.uk/property/property-shortage-continues-to-push-up-house-prices.html