New data is showing that the property market is proving much cooler than is typical for this season of the year. The uncertainty of the current political climate is impacting the spring period, which is typically more active. Our own data scientists have discovered that the typical prices for properties coming up for sale have gone up by only 0.4% this month, and that’s the smallest average monthly rise for this time of year going back to 2011.
A Mixed Picture
Miles Shipside is a property expert at Rightmove. He says that while March is the typical start of the spring season, housing market temperatures have yet to rise. Buying activity isn’t as warm as it usually is, and many buyers are being hesitant until the political climate is far more settled. That said, the further anyone gets away from London’s market, the more resilience they find. There is still a solid bedrock of demand for good properties at fair prices, and this is being reinforced by things like cheap mortgage borrowing and ongoing housing needs.
Regardless of the political uncertainty, there is steady search activity on most property websites.This is indicative of home movers who are maintaining a watching brief over the market, and this could turn into an eventual bounce should Parliament ever find a Brexit breakthrough. London is still the real drag; elsewhere, nine of 11 regions are continuing to see their new-to-market sellers listing prices higher than they were a month ago.
Capital prices are down 1.1% on the prior month, and the other region which recorded a monthly fall was the North East, coming down 1.3% However, the respective pricing histories they have are quite different.
London prices remain 68% higher than a decade ago, and buyers are looking for the prices to settle at fair value levels, although the North East is seeing asking prices from new sellers up only 8% in that time frame.
Effects of Uncertainty
Shipside went on to add that neither markets nor people like uncertainty, although even at a time when sales agreed numbers have come down by 7%, it means they’re still running a full 93% of the prior year’s levels. Many prospective buyers are moving ahead with their lives, or just viewing the price lull as a chance to either get on the housing ladder or just move up a rung, since the average asking price nationally is 0.8% cheaper compared to a year ago.
Agents largely agree that the property market would stand to benefit from a Brexit resolution sooner instead of later, as would floor plan designers and other home improvement firms.
Tom De Ville is the Director at Fine and Country Nottinghamshire. He says that the wheels of the housing market are still turning, but they’re not turning as quickly this year as compared to this time last year. Sellers and buyers alike are proving to be hesitant. All those who are hesitating now would find a lot of reassurance from the certainty of a solid political outcome, which would likely grease the market wheels into turning again. It would also go a long way in boosting badly needed supply. Sensibly priced houses are still selling, although there a number of sellers who have to realise that the market has seen a power shift away from being a sellers’ market into a buyers’ market.
Hopes for the Future
Guy Gittins is the Managing Director of Chestertons. He says that Brexit uncertainty dragging property prices down for a short while was inevitable, particularly as the deadline drew near and more buyers were waiting to see what would happen. On the other hand, he says that his establishment has experienced quite a busy start to this year, as January and February noted sharp increases in viewing, buyer registrations, and offers. He feels this reflects the pent-up demand and that it suggest prices are currently at levels which buyers find comfortable. He assumes from this that the monthly drop is actually nothing more than a temporary blip, and he expects prices to stabilise once the market can have some real clarity about Brexit. He goes on to say that London property is likely to stay a solid investment, no matter how Brexit turns out, especially as the London market has outperformed nearly every other asset class over both the medium- and long-term.