The prevailing political uncertainty has resulted in a dip in the performance of the property market which is normally busy during spring, according to the latest numbers.
This month, the average price of properties coming into the market for sale has grown by a mere 0.4 percent, the lowest average monthly increase since 2011 during this period of the year, according to our data scientists.
A Waiting Game
According to Miles Shipside, a property expert at Rightmove, temperatures in the property market are still low even though spring started in March. He continued by saying that some home buyers are waiting for the political climate to settle down, resulting in lower than normal buying activity. Also according to him, however, low mortgage rates and continuing housing requirements continue to drive solid demand for a stronger market, for the right reasonably priced properties, further away from the London property market.
Property websites are still experiencing a consistent level of search activity even with the prevailing uncertainty in the political world. The market could bounce back, if and when a breakthrough on Brexit is arrived at by Parliament, as buyers are apparently tracking the market closely.
London and the Regions
New to the market property sellers are seeing monthly price gains in nine out of a total of 11 regions with the London market being the only problem area.London prices have taken a 1.1 per cent dip from last month’s average, while the North East, the only other region reporting a decrease, experienced a 1.3 per cent dip. They both, however, bear highly contrasting pricing histories. Prices in the North East have grown by 8 per cent over the last decade, while they have grown by a whopping 68 per cent in London over the same period, with home seekers looking for the prices to stay at a level of fair value.
Uncertainty and Its Effects
Miles Shipside also stated that even though sales figures show a 7 per cent dip on last year’s performance, this still means that 93 per cent of that performance is still being met even though buyers and markets are not fond of uncertainty. He went on to say that the 0.8 per cent decrease in this year’s house prices as compared to last year is being seen as an opportunity to climb on to the next step in the housing ladder by some buyers, while others are moving along with their lives. Others are looking into floor plan services and other home improvement opportunities.
Resolving Brexit faster would be advantageous to the market according to agents as well. According to Fine and Country Nottinghamshire Director, Tom De Ville, the hesitant nature of buyers and sellers in the property market this year is responsible for the performance dip we are seeing, even though the market continues to hum along. Tom also said that supply would be boosted, and the market would move faster with political certainty as this would restore the confidence of those who are holding back. He finished by saying that some sellers are yet to appreciate the fact that the market has now turned into a buyer’s market from a seller’s market, with reasonably priced properties still exchanging hands.
Future Trends in the Property Market
As the deadline approaches, and buyers hold back to see what happens, it was always clear that the uncertainty associated with Brexit would negatively affect the performance of the housing market in the short-term according to the Managing Director of Chestertons, Guy Gittins. He continued to state that all indications are that buyers are now comfortable with current prices as the company has seen an increase in offers, viewings and buyer registrations in the months of January and February, representing a positive start to the year. Once the uncertainty surrounding Brexit is resolved, he expects prices to bounce back, putting a stop to the current downward trend. He concludes that regardless of the outcome of Brexit, London property will continue to be a great investment, having reported better performance, over the medium term and long term, as compared to many other asset classes.