It would appear that the summer slowdown is well on its way with asking prices and the number of homes coming to the market falling. But there are signs that it is more than this.
On the one hand there are those arguing that the market has been remarkably resilient in the face of Brexit uncertainty and that prices are still rising in many parts of the country, while on the other there is an argument that it really is going to set in as the next deadline of October approaches with the summery slowdown not ending.
Indeed, asking prices in the UK fell by 0.2% in the 12 months to July 2019 and also by 0.2% month on month, the first monthly fall so far in 2019, the latest Rightmove index shows. And the asking price data from Home.co.uk also shows a fall in asking prices of 0.4% in England and Wales.
The Rightmove data shows that price of newly listed property in the four bedroom plus market fell by 1.1% month on month, while lower and middle sector properties are holding their price better. The firm says that the figures indicate that it is likely to be a buyers’ market in the second half of 2019.
It also points out that less property is coming to market, but it is taking longer to secure a buyer, so estate agents’ average stock per branch is at its highest since July 2015 while the time it takes to secure a buyer is at the longest at this time of year for six years. Some sobering thoughts.
With continuing political uncertainty it is likely that buyers in areas where there is an oversupply will have a stronger hand negotiating lower prices in the coming months. Rightmove director Miles Shipside believes that there should be a better bargaining opportunity for those who have hesitated and missed the busier spring market if they can now find the confidence to engage without waiting for more certainty.
The Home.co.uk index report points out that asking prices movements are dependent on location. Month on month asking prices rose in all English regions except the West Midlands where there was no change, and in Wales and Scotland driven mainly by aspiration and tightening supply but not increasing demand.
However, the slowdown continues to gradually spread through the regions. Rising time on the market figures and slowing growth indicate that the East and West Midlands are heading towards a period of price correction after several years of unsustainable growth.
But it is all okay, apparently as overall market fundamentals remain sound apart from ñ oh yes, confidence. Commentators point to buoyant mortgage approvals but the latest figures from UK Finance show that it is the remortgage market that is doing well, not people buying.
While, we tend to concentrate on the residential housing market, it is always worth looking at other sectors and they are slow too, particularly the once buoyant rural land market. Activity in the farm land market in the UK is at its lowest point for decades.
In the first half of 2019 just 74,000 acres across Britain was released for sale, almost the lowest recorded acreage of publicly marketed land since 1995, says the latest market update report from Savills.
The exceptions were 2001 due to foot and mouth disease when just 61,000 acres were publicly marketed and 2004, the year before the single farm payment was introduced, when supply in the six month period was 74,000 acres, the same as this year.
The combination of policy change and political uncertainty is causing sellers to be more nervous than buyers but the research shows that average values across Britain have remained stable during the second quarter of this year. Savills is predicting the current stability in average values will continue while demand continues, especially for the “right” farms, in a market where product is very limited.
It is a further sign of lack of confidence. Although there are plenty of people talking up the resilience of the residential market, I cannot help but think that there will be another low as we approach October and if Brexit is delayed again, something that could happen according to the new head of the European Union, then it will be a winter of discontent.
Ray Clancy
Editor Property Wire
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