Recently released data indicates that the property market is slower than usual for this period of the year. The bustling spring period has been impacted by the volatile political environment. Our property marketing experts at Fourwalls explore this further.
Our data analysts have discovered that the mean price of property ready for sale has increased by a slight 0.4% this month, making it the smallest monthly increase during this period of the year since 2011.
Insight from Rightmove
Miles Shipside, a property expert with Rightmove, has confirmed that since the beginning of March property prices have not gathered any steam. He observed that activity was cooler than is the norm during spring as property buyers wait for a better political climate. Also, he noted that property markets outside London were resilient with some reasonable demand. Demand is supported by the continuing housing needs, low mortgage rates and attractive properties available at the right price.
Despite the upheavals regarding Brexit, searches on property sites have remained stable.
This implies that home movers are still keeping tabs on the property market, which could provide a bounce when and if Parliament is able to successfully negotiate on Brexit.
What’s happening in London?
London has been a significant drag on the market. Nine in a total of eleven zones are still having new sellers on the market pricing at a greater price than one month ago.
In the capital, prices have fallen by 1.1% compared to the previous month. The North East is another region that has recorded a decline, falling by 1.3%. However, the pricing histories of these two regions are quite divergent.
London prices maintain a 68% increase from a decade ago, with prospective buyers waiting for prices to come down to fair value. On the contrary, the North East has just had an increase of 8% in seller asking prices during the period.
Shipside added that people and markets are averse to uncertainty and though property sales were down they were still at 93% of the previous year. Most of the prospective buyers are going on with their normal lives while others are appreciating the current price weakening as an opportunity to begin home ownership or upgrade their dwelling, with the mean asking price nationally being 0.8% lower than one year ago.
Waiting for Brexit
Agents are also in agreement that a breakthrough on Brexit as soon as possible would boost the housing market.
Tom De Ville acknowledges the housing market is still chugging along but with little momentum when compared to last year as both buyers and sellers are hesitant based on the current political climate. A definitive and clear solution to Brexit will provide reasonable assurance to the hesitant crowd and would assist in propelling the housing market into growth mode boosting the efforts to meet the current supply deficit. The director at Fine and Country Nottinghamshire continued to note that there has been a shift in the market to a buyers’ market from a sellers’ market, something most sellers are unaware of.
The View from Chestertons
The managing director of Chestertons, Guy Gittins, had similar views, stating that the uncertainty arising from Brexit would continue to exert downward pressure on prices, especially as 29 March gets closer and many buyers adopt a wait and see attitude. He noted that there was increased activity at the beginning of the year, with a significant increase in registration of buyers, property viewings and offers in the first two months of the year. This indicates pent-up demand and implies that prices are at a comfortable level for buyers.
Guy sees the drop in the current month as temporary and expects prices to continue rising as soon as Brexit is resolved. Finally, he pointed out that the London property market had surpassed the performance of other classes of assets and believes property is still a stellar investment regardless of how Brexit turns out.