"The nation’s property market is suffering from the ongoing confusion around Brexit and what it will mean for our economy"
The latest data released from estate agents, haart, has shown that transactions, viewings and registrations continue to decline as uncertainty surrounding Brexit rumbles on. The report revealed that house prices in October rose by 0.5% on the month and by 1.5% on the year - with the average UK house price now sitting at £227,566.
New buyer demand for homes fell by 2.0% since September, and continues to be down significantly by 22.4% on the year. Additionally, the number of properties coming onto the market has fallen by 5.3% on the month and by 6.1% on the year. With a decrease in stock, the number of buyers chasing every instruction has risen slightly, as there are now nine 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 whilst 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 by 2.8%, and is up on the year by 5.6%. This comes as the rate at which first-time-buyers are entering the market drops slightly on the month by 1.5%, and by a much larger 30.1% on the year.
In line with the rise in the average purchase price for first-time-buyers, deposits have risen too by 0.1% on the month, however they are down by 2.5% on the year.
The average property price in London has jumped back up this month by 5.7%, pushing up annual growth to 7.6%. This is higher than the annual growth seen across the UK. However, this comes as demand for properties has fallen this month by 0.3%, and is 36.4% down on the year. At the same time, the number of properties for sale has decreased by 10.6% on the month, and a huge 17.9% on the year. Sale transactions also continue to drop, at 5.1% on the month and 23.7% annually.
The number of tenants entering the market has fallen by 2.6% on the month, and by 13.4% annually, decreasing the rate of demand. This has pushed down rents marginally, as the average rent now sits at £1,385 across the whole of the UK. On the other hand, demand is back up again in London, by 6.8% on the month, however is still down on the year. The average rent has fallen and now sits at £1,961.
Landlords continue to return to the market this month, as numbers registering to buy increase by 5.4% on the month across the UK, and by a larger 7% in London. However growth remains down annually. Despite an increase in demand, sale prices have fallen, by 3.5% on the month across the UK and by 9.0% in London. The number of transactions remain down on the month and on the year in London, and on the month across the UK. However annually, we are seeing a 28.6% increase in transactions across the UK.
Paul Smith, CEO of haart estate agents, comments: “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.
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.
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.”