The latest data and analysis from Twenty Ci has revealed that despite continued resilience in the property market over the last quarter, early indications show no early signs yet of a ‘Boris bounce’ in new instructions or average asking prices.
Overall property exchange volumes increased slightly year on year by 0.8%, with 928,234 homes exchanged in the 12 months to the end of the year. Yearly volume for Q4 comprised 1,673,845 new instructions, a fall of 3.4% to December 2019 to 225,069 fall throughs and 798,110 withdrawals to change agent or withdraw from the market.
Asking prices remained flat overall across the country during the last quarter of the year, with some price growth in London (2%), across Scotland (4%) and the North of the UK (1-2%). In comparison, many areas in the south of the country saw a slight decline overall last year, showing a small percentage reduction in average asking prices (-1-4%), with the exception of London.
This resilience in average asking prices despite the large political and economic uncertainty in 2019 is consistent with the shortage of housing stock currently available, which has enabled sellers to maintain close to their desired price.
Colin Bradshaw, Chief Customer Officer, TwentyCi: “The unprecedented turmoil of 2019 has demonstrated the resilience of the UK property market with transaction volumes and average prices remaining remarkably stable against a back drop of political upheaval and economic threats.
“Consumers have still been behaving hesitantly when it comes to both buying and selling their homes, however with Brexit now planned for later this month, we could see a welcome boost to the slow-moving property market of 2019, at least in the short term as people look to get on with the job of moving house.”
Middle England to drive the ‘Boris bounce’
The much anticipated ‘Boris bounce’ is yet to materialise in the first weeks of 2020. However, with consumer confidence reported as up and Brexit confirmed for the end of January, many property analysts expect the first quarter to see an uplift in the level of transactions. In particular if caution subsides within the power house of the property market of ‘Middle England, Middle Income’ a significant and material change to the market could occur in a relatively short space of time.
Colin continues: “The value of Homemovers to the UK economy exceeds £12 billion per annum on expenditure on the home outside of the transaction. Enabling this high value consumer audience through political stability, property affordability and stock availability will be an essential pillar to fuel the UK economy and boost retail confidence.”
Household income band
At opposite ends of the scale, households with income bands of £15,000 - £40,000 and £70,000+ are proportionally buying and selling more properties in Q4 2019, than the same period one year ago.
Outside of these households with the lower income bands and the more affluent end of the scale is the squeezed middle. Exchanges for £40,000 - £60,000k income band households have slowed by 11 to 16% when compared to the same quarter last year.
Online Vs High Street Agent
Interestingly, online agents took 10% market share of the lower end of the market for the first time for properties valued at less than £200k. This new milestone has proved the consistency of online agents in steadily building on their popularity with homeowners of lower priced properties. Market share exceeded 10% in the North West, East Midlands, West Midlands & Yorkshire & The Humber; similarly for properties of less than £200k the marketshare was over 10%. While overall nationwide online agent market share remains steady at 7.9% for a fourth consecutive quarter.
Colin comments: “This is a significant win for online agents, yet again demonstrating their appeal to the lower-value end of the housing market, however for Purplebricks to achieve their stated goal of 10% market share, a significant penetration into other populace regions of the UK and for properties greater than £200k is essential. Polarisation of their proposition will inhibit the strategic objective.”
Average asking price in UK cities
Nationwide, most major cities saw an increase or at least holding steady on average property asking prices, with Glasgow showing the highest increase of 7%. The exceptions where average asking prices fell in the 12 months to December 2019, were Cardiff (-1%), Southampton (-2%), Plymouth (-2%) and Norwich (-1%). Peterborough saw the largest fall of -4%, possibly due to a surplus of housing stock, given high levels of new build homes being built in this area.
Sales Vs Rent – UK cities
The percentage of rental stock available across the UK is now typically 60% of all properties in each quarter, rising to 73% in London, reflecting a clear dynamic shift in tenure from owner occupied to rental in the vast majority of cities in the UK. The new Government will undoubtedly be pressed on the affordability and availability of properties to buy as opposed to rent, however the macro changes required to achieve this are unlikely to be achieved for several years.