According to the latest report from Haart, house prices in September have fallen slightly by 1.1%, pushing down annual house price growth for the UK to 2.7%. The average UK house price now sits at £226,229.
New buyer demand for homes has risen by 1.5% since August, however is still down on the year, by 22.4% across the whole of the UK. Additionally, the number of properties coming onto the market has fallen by 2.8% on the month, and by 2.3% on the year. With a decrease in stock, the number of buyers chasing every instruction has risen slightly, as there are now 10 buyers for every new property that comes onto the market across the UK.
The market has become less efficient this month, as the number of transactions has decreased but the number of viewings has risen slightly, meaning that buyers are choosing to look at more properties before they buy.
The average purchase price for first-time-buyers has risen this month slightly by 1.7%, however it is still down on the year, as it currently sits at £165,092. This comes as the number of first-time-buyers entering the market continues to fall, by 12.6% on the month and by 32.1% on the year.
Although the average price of a first-time-buyer home has risen slightly, the average deposit is down by 4.9% on the month and 2.8% on the year.
The average property price in London has declined slightly at 0.7% on the month, however it is back up on the year by 2.4%. This is still less than the annual growth seen across the UK. Demand for properties across London has risen this month by 3.8%, however is still down by 38.5% on the year. At the same time, the number of properties for sale has decreased by 4.8% on the month, and 8.9% on the year. Sale transactions continue to see a drop, at 7.4% on the month, and 17.8% annually.
The number of tenants entering the market has fallen by 2.5% on the year, and by 18.5% annually, decreasing the rate of demand. This has pushed down rents marginally, as the average rent now sits at £1,367 across the whole of the UK. However the market remains steadier in London, as demand falls by a lesser 1.9% on the month, although fell by 24.4% annually. The average rent fell by 1.8% and now sits at £1,895.
Landlords are beginning to return to the market after retreating due to the SDLT rise on additional properties in April, as we see the number of landlords registering to buy increase by 9.2% across the UK, and by 4.1% in London, however numbers for both are still down on the year. This increase in demand has pushed up sale prices slightly, by 1% across the UK. However they are down 1% in London. The number of transactions across the UK was down by 13.7% this month, however in London transactions saw a 20.8% increase, despite being down annually.
Paul Smith, CEO of haart estate agents, comments: “Although we are seeing more positive consumer confidence materialising post-Brexit, the UK’s housing market is still marked by a number of negatives, as prices and transactions continue to fall on the month. We are however starting to see some improvements, in the form of the number of new buyers that are entering the market, and the number of viewings that are taking place.
Action needs to be taken to reverse the sluggish pace of activity, to turn these initial engagements with the property market into transactions. A greater injection of confidence and stability is also important for housebuilders, in order to reassure them they will get good margins on the potential sale price of new homes if they start building again, particularly crucial in order to reach the ambitious housebuilding targets that Sajid Javid has set.
This month’s monitor shows landlords are starting to return to the market despite the extra 3% hike in Stamp Duty imposed by George Osborne. This is a positive that needs to be encouraged, especially considering the Royal Institution of Chartered Surveyors suggests 1.8m more households will be looking to rent by 2025 and yet 85% of landlords have no plans to increase their portfolios.
Surely it is time the new Government overturns the negative SDLT hikes both aimed at buy-to-let investors and at the top end of the scale. Measures need eased in order to increase fluidity within the market as these charges are without doubt causing a log-jam – no wonder when buyers have to fork out and extra 3% on top of the 7% they are already paying.”
