Activity is within usual expectations for the run-up to the summer holiday season and buyer demand in the two weeks since the European Union referendum result is consistent with 2014 although down on 2015.
The monthly report from property portal Rightmove points out that the same period in 2015 benefitted substantially from a post general election boost so enquiries this year are down 16% compared to that period.
It adds that as 2014 was not distorted by the election it is a better basis for comparison, and buyer enquiries are at the same level as the like for like two weeks in 2014. Since 2010 the month of July has recorded average price falls of 0.4%.
The Rightmove data shows that new seller asking prices fell by 1.2% or £7,407 this month in Greater London while in inner London they fell by 2.3% or £19,051. The seven cheapest inner London boroughs all saw price of newly listed property falling while asking prices in outer London were unchanged.
Asking prices fell by 0.7% month on month in the North East, taking the average to £147,251 but are still up 0.3% year on year. In the North West they fell by 0.5% month on month to £176,277 and are 3.6% higher than a year ago and in Yorkshire and Humber they were down 2.1% month on month to £172,412, and up 1.3% year on year.
In the West Midlands month on month prices were down 1.6% to £200,129 and still up by 3.6% year on year while in the East Midlands they were down 0.2% month on month to £190,192 and are up 3.9% year on year.
The East of England saw asking prices fall by 0.7% to £313,255 but they are 7.3% up compared to a year ago. In the South East they fell 0.6% to £386,988 and are up 6.7% year on year while in the South West they were down 0.4% to £286,155 and up 5.2% year on year.
In Wales asking prices fell by 2.3% month on month, taking the average price of a newly listed home to £177,280 but prices are 2% up compared to July 2015.
According to Rightmove, most agents report market momentum continuing due to shortage of suitable property for sale, buyers fearful of missing out on scarce choice, and affordability and availability of low mortgage rates.
Sellers seem undeterred as compared to the same period last year, the two weeks pre-referendum saw the number of new properties coming to market down by 8%, and the two weeks post referendum saw them up by 6%.
Overall the figures covering the last four weeks, two weeks before and two weeks after the referendum, give an early but reassuring view into the short term effect of the political turmoil surrounding the vote and the decision to leave the EU.
Rightmove reports that although many estate agents report that business is now returning to the previous norm following the surprise referendum result, it believes that it is too early to draw any medium or long term conclusions.
‘As far as the price of property coming to market is concerned, the fall of 0.9% is within the range that we have seen at this time of year since 2010. With the onset of the summer holiday season new sellers typically price more conservatively and the average drop in the month of July is 0.4% over the last six years,’ said Miles Shipside, Rightmove director and housing market analyst.
‘Perhaps unsurprisingly this July’s fall is marginally larger, as political turbulence has a track record of unsettling sentiment. Indeed last year saw a seasonally unusual 0.1% fall in the run up to the May election, and a June and July price surge as a result of the post-election boost. Average new seller asking prices were up by 3.1% over that two month period,’ he added.
The data also shows that with available property for sale per estate agency branch 16% lower in 2016 compared to 2014, enquiries per property remain remarkably resilient. Market conditions change from year to year, although one commonality between 2014 and 2015 is that transactions ended up virtually identical according to HMRC, a post-credit-crunch record of 1.1 million each year in England and Wales.
Then 2015 saw a quieter first half of the year followed by a very strong second half due to the election effect. The opposite is likely to be true this year, with a very active first five months of 2016 showing HMRC transaction numbers 18.2% ahead of the same period in 2015, assisted by the additional momentum from the first quarter buy to let surge.
‘Housing markets do not like uncertainty, with positive sentiment typically driven by confidence and momentum, supported by low borrowing costs. There seems to be little prospect of an increase in historically low mortgage rates in the short to medium term, with even greater certainty readily available with increasingly competitive five year or even 10 year fixed rate,’ Shipside pointed out.
‘Agents in areas where stock shortages were driving momentum before the referendum say activity has recovered quickly, with buyers’ fear of losing a scarce property a key factor. They say that very few deals have fallen through as a direct result of post Brexit jitters. Those areas of the country whose housing markets were struggling or readjusting earlier in the year, such as parts of London, will continue on what is often a fairly lengthy path of price reductions to encourage buyers to return in numbers,’ he explained.
