According to the latest data, the property market is cooler than normal for the spring, as buyers are feeling wary about the current economic and political climate. Researchers have found that the average price of property on sale increased by just 0.4 per cent this month, the smallest increase for the spring since 2011. Here, Lewis Surveys explores the market.
Property expert Miles Shipside, from Rightmove, noted that while March is the beginning of spring, the housing market remains cool. Buying activity is problematic, as buyers are choosing to wait and see what will happen and are hoping for a more stable political climate. The market is more resilient as you head further away from London, and there is still demand for property. This is reinforced by cheap borrowing for mortgages.
Search Activity Remains Steady
Search activity on the biggest property websites is steady, even with political uncertainty. This suggests that movers are watching the market carefully and if there is a Brexit breakthrough then there could be a recovery for the housing market.
The main drag on the market is London. Nine out of the eleven regions are still seeing new to the market property sellers putting their prices higher than they were a month ago. Prices in London have fallen by 1.1 per cent, and prices in the North East are down by 1.3 per cent for the month. Historically, though, the prices are rather different.
London’s prices are still around 68 per cent higher than they were a decade ago, and buyers are looking for prices to settle at what they see as a fair value. In the North East, however, property prices have increased by just 8 per cent over the same time period.
Markets Remain Uncertain
Shipside notes that people, and the markets, do not like uncertainty. Sales agreed figures have dropped by around 7 per cent, and a lot of potential buyers are seeing the lull in prices as a chance to either get on to the housing ladder for the first time or move up the ladder. Average national prices have fallen by around 0.8 per cent compared to last year.
The housing market could benefit from a resolution to the ongoing uncertainty surrounding Brexit, and the sooner that happens the better it will be for the markets. Tom De Ville of Fine and Country Nottinghamshire notes that the housing market is still moving, but the wheels are moving quite slowly. Buyers and sellers are both hesitant, and having some certainty politically would help to reassure people who are currently hesitant to commit. It would help to boost supply, and the demand is there in the market. Houses that are priced sensibly will still sell, even today, but at the moment there are still a number of sellers who have not realised that there has been a shift in power, and that the market is no longer a seller’s one, but rather a buyer’s market.
Buyers Opting to Wait
Guy Gittins, the Managing Director at Chestertons, noted that it was almost inevitable that Brexit related uncertainty would put a drag on property prices in the short term, especially as the deadline draws closer. Buyers are adopting a wait and see approach. We are seeing a busy start to the year and a sharp increase in viewings and buyer registrations. This indicates that there could be some pent-up demand and that buyers are seeing prices that make them more comfortable about committing. He believes that this month’s drop could be a temporary blip, and that prices may recover when the market has some more clarity about Brexit. Over the medium and long term, the London property market has usually outperformed most asset classes, and it is likely to remain a good investment option, whatever happens with Brexit.