By Frances Traynor
22nd November 2017
Thu 26 Oct 2017 by Frances Traynor
Fewer properties on the market and lower prices – those are the new hallmarks of the UK housing market, according to the latest research.
The Halifax's June House Price Index revealed that house prices fell by 0.1 percent and annual price growth dropped to 2.6 percent in the second quarter of 2017, the lowest annual growth since May 2013. That took the average price of a house in the UK to £218,390 – while that price is still £63,272 higher than the average price in April 2009, when the UK was at the height of the financial crisis, the slowing of both house prices and supply marks a new trend in UK property.
That is confirmed by the UK Residential Market Survey from the Royal Institute of Chartered Surveyors (RICS). Its monthly review of the housing market from the point of view of its membership revealed less stock on surveyors' books and stock on estate agents' books at an al-time low, fewer sales completed and flattening prices across most regions but particularly in London and the south-east.
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Respondents pinpointed a variety of factors affecting the housing market: 44 percent of those who participated cited the political uncertainty caused by an inconclusive general election result, with 27 percent pointing to the ongoing turmoil around Brexit as another issue.
Simon Rubinsohn, the RICS's chief economist, said: "Perhaps not surprisingly in the current environment, the term 'uncertainty' is featuring more heavily in the feedback we are receiving from professionals working in the sector.
"This seems to be exerting itself on transaction levels, which are flatlining and may continue to do so for a while, particularly given the ongoing challenge presented by the low level of stock on the market."
He also pointed out that there is no "single" housing market in the UK, with RICS indicators suggesting an increasingly divergent picture across the country. London house prices have dropped by 1 percent allied with a fall in sales in the capital in June, but surveyors in the West Midlands, north-west and Wales painted a brighter picture for their region.
Martin Ellis, housing economist for the Halifax, pointed to rising inflation and flat earnings as another important factor in depressed house prices and falling sales.
He said: "Although employment levels continue to rise, household finances face increasing pressure as consumer prices grow faster than wages. This, combined the new stamp duty on buy to let and second homes in 2016 appears to have weakened housing demand in recent months."
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