According to new data, the property market is much cooler than it normally is during this time of year, with what is traditionally a busier spring season being affected by the current uncertain political climate. It has been found by our data scientists that the average prices for properties that are going on sale have increased this month by only 0.4%. That is the lowest average monthly increase since 2011 for this time of year.
A Slow Start?
Miles Shipside, a property expert at Rightmove, says that although March marks the beginning of spring, the housing market’s temperatures have not risen yet. Buying activity is still cooler than normal, with some buyers being hesitant and waiting for the political climate to settle. The further away that you get from London, however, the more resilience there is in the market and there is solid demand still for the right property being offered at the right price, which is reinforced by cheap mortgage borrowing combined with ongoing housing needs.
Despite all of the political uncertainty surrounding us, search activity remains steady on property websites. This indicates that house movers are keeping a close eye on the market, and that may eventually lead to a bounce if and when a breakthrough on Brexit is found by Parliament.
However, the main drag continues to be London, with nine out of the 11 regions seeing new-to-market sellers still pricing higher compared to one month ago. In the capital, prices are down by 1.1% compared to the previous month. The North East is the other region recording a monthly fall, which is down by 1.3%. However, they have very different respective pricing histories.
Compared to ten years ago, London prices are still 68% higher, with buyers searching for prices that settle in at a fair level value. However, in the North East new sellers are asking prices that have only gone up by 8% during that same time.
Need for Certainty
Shipside also said that people and markets don’t like uncertainty. That said, although sales agreed numbers have seen a 7% drop, they are still running at a 93% level of last year’s numbers. A majority of potential buyers are either getting on with their lives or using the price lull as a chance to get on the housing ladder or move up to the next rung. Compared to a year ago, the national average asking prices are 0.8% lower.
Agents agree that the market, and related businesses including local architects, could really benefit from Brexit reaching a resolution sooner instead of later.
Tom De Ville, who is the director of Fine and Country Nottinghamshire, states that in the housing market the wheels are still turning, but compared to this time last year they are turning more slowly since there is hesitation from both sellers and buyers. Having a political outcome that was more certain would help with reassuring those who are currently hesitating and with getting the wheels turning faster once again, and help with boosting much-needed supply as well. Sensibly priced houses are still selling, but some sellers haven’t realised that the power has shifted to a buyer’s market from a seller’s market.
A Bright Future for London Property
Guy Gittins, who is Chestertons’ managing director, says that it was inevitable that all of the uncertainty surrounding Brexit would end up dragging down property prices over the short term, especially with the date getting closer and buyers tending to sit back to wait to see what happens. He notes, however, that they have had a very busy start to the year, and have experienced a sharp increase in buyer registrations, viewings and offers through January and February, reflecting pent-up demand and indicates that prices are at a level now that buyers are comfortable purchasing at. He, therefore, sees this month’s drop as more of a temporary blip and is expecting prices to start to recover after the market sees more clarity on Brexit. London property, over both the long and medium term, has outperformed a majority of other asset classes, and Gittins believes that regardless of what the Brexit outcome is, it will continue to be a solid investment.