Robert Gardner, Nationwide's Chief Economist, said: “Measures of housing market activity remain fairly subdued, with the number of residential property transactions 10% below the levels recorded in the same period of 2015 in recent months. However, this weakness may still in part reflect the after-effects of the introduction stamp duty on second homes introduced in April, where buyers brought forward transactions to Q1 to avoid additional stamp duty liabilities. Policy changes impacting the buy-to-let market may also be playing a role in dampening activity.
Data releases point to fairly stable demand conditions in the near term. Mortgage approvals edged up modestly in September, though they remain weak by historic standards. Surveyors report that new buyer enquiries have increased modestly in recent months.
While the economic outlook is uncertain, solid labour market conditions and historically low borrowing costs should provide support to buyer confidence. Moreover, the relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight, even if economic conditions weaken in the quarters ahead, as most forecasters expect."
Ian Thomas, Co-Founder and Director of online mortgage lender, LendInvest, had this to say: “We are starting to see activity pick up in the housing market. Sellers have become more realistic about the price they can achieve for their property since the Brexit vote, while the fall in the value of the pound has made UK property more attractive to international buyers. There is a lot of talk around the industry about the prospect of Stamp Duty being changed again in the Autumn Statement, which could provide a further boost.
Landlords are particularly active at the moment, though their efforts are focused on refinancing rather than adding to their portfolios. With the stricter affordability requirements coming into force next year, many property investors are looking to remortgage now. There is a much reduced appetite to actually buy more properties - figures from the Royal Institution of Chartered Surveyors suggested almost nine in ten landlords have no intention to add to their portfolios this year.”
Alex Gosling, CEO of online estate agents HouseSimple, commented: "There have been signs for a few months that the property market might be running out of steam, and in October the inevitable happened.
This is not the time to press the panic button because it's unlikely that prices are about to start tumbling. The labour market is strong, supply is still low and buyer confidence hasn't dissipated. The fallout from the EU Referendum doesn't seem to be at the front of buyers' minds, although that could change as we get closer to Article 50 being triggered early next year. There are still plenty of people looking to purchase, but it just feels like an over-priced market has finally taken its toll.
Property transactions are down on levels we would normally expect this time of the year and it may be that buyers are simply taking a breather until the New Year."
Mario Berti, Head of Octopus Property, said: “While the annual rate of house price growth is down, the End of Days scenario some predicted for the property market hasn’t materialised. But at the same time the UK is facing a turbulent year ahead. The low interest rate environment, strong labour market and ongoing lack of supply are continuing to support prices. But the return of inflation will lead to a fall in real incomes and that may continue to dampen consumer demand and hit property volumes.
The triggering of Article 50 is another major hurdle for the UK property market. That makes things official and will test consumer and business sentiment all over again. Factor in the US election and elections on the continent and you have all the ingredients for uncertainty.
What we negotiate with Europe will arguably shape the medium and long-term performance of the UK property market."
Jeremy Leaf, north London estate agent and former RICS chairman, added: "These figures are no great surprise because they back up what has been said in other surveys identifying house price movements in the last few months. However, the figures do show that prices are still being supported by a shortage of property on the market which is forcing those buyers who are still keen to move to pay more than perhaps they may otherwise have wanted or expected to.
Nevertheless, we are still finding that buyers and sellers have longer term confidence in the market and are pulling out all the stops where they can to take advantage of lower borrowing costs as many appreciate that they won’t be around for ever as inflation will inevitably take its toll."
