Paul Smith, CEO of haart, the UK’s largest independent estate agent comments:
“This month sees a property market that is still suffering from the Brexit blues. House prices are down, but are not out – as we near the bottom of the post-Brexit dip, with interest rate falls likely to help pick things back up again in the second half of the year. It is positive to see that transactions are still up for the second month in a row, so there is still plenty of activity in the market. We are also seeing a more positive picture for first-time-buyers, as mortgage rates decrease, along with deposit and purchase prices, making it a good time to buy.
“What has become most apparent is that for London, the rise in the SDLT earlier this year has had a more profound impact on the market than Brexit has, as we see buy-to-let landlords continue to venture out of the capital and into regions where they are now more likely to see more lucrative returns on their investment. However, the continued lack of supply will always hold the market up in our resilient capital, and this is unlikely to see a too damaging effect long-term.
“The pound is continuing to recover week on week and broader business confidence data from YouGov shows the largest month on month jump in confidence in over 3 years – it’s too soon to say we’re ‘over’ Brexit, but the fog of uncertainty is beginning to clear. This boost in confidence should be reflected in property activity in the coming months as we return to relative normality. With the summer lull coming to an end, expect to see the market moving onwards and upwards in the autumn.”
House prices in August have fallen slightly by 1.9%, pushing down annual house price growth for the UK to 5.0%. The average UK house price now sits at £228,831.
New buyer demand for homes has fallen, by 3.8% on the month and 13.2% annually across the UK. Additionally, the number of new properties coming onto the market has fallen by 4.4% on the month, but has risen 5.2% on the year. With a decrease in stock, the number of buyers chasing every instruction has risen slightly, as there are now 9 buyers for every new property that comes onto the market across the UK.
The market has become more efficient this month, as the number of transactions has increased but the number of viewings has fallen, meaning that buyers are choosing to look at fewer properties before they buy.
First-time-buyer house prices have also fallen, by 4.5% on the month and 0.9% annually, pushing the average value of a first-time-buyer home down to £167,764. This comes as the number of first-time buyers entering the market has fallen, by 7.3% on the month and 18.7% down on last year.
As the average first-time buyer home price has decreased, so has the average deposit price, by 5.8% on the month, however it is 1.3% higher than the same time last year.
The average property price in London has declined slightly at 3.4% on the month, however is 2.7% higher than last year. This is less than the annual of rate growth seen across the rest of the UK. Demand for properties in London has also decreased, by 6.1% on the month and 25.5% on the year. At the same time, the number of properties for sale has decreased by 5.2% on the month, however are up 1.9% annually. Sale transactions have also seen a slight drop by 0.7% monthly, and steeper still, 12.8% annually.
The Lettings Market
The number of tenants entering the market has fallen by 10.7% on the month, and by 26.6% annually, decreasing the rate of demand. This has pushed down rents marginally, as the average rent now sits at £1,353 across all of the UK. However the market remains steady in London, as demand rose by 0.7% on the month, although fell by 23.3% annually, meaning the average rent fell by 1.4%, now sitting at £1,902.
We are still continuing to see a number of landlords retreat from the market after the SDLT increase on additional properties. London in particular is bearing the brunt of this, with numbers registering down -5.3% on the month and 52.2% annually and by a more considerable 13.4% on the month in London, and 59.8% annually. A slight increase in demand has pushed sale prices of buy to let properties up, by 0.9 on the month in London on and 0.1 in the UK. The number of transactions also saw a healthy increase on the month both in London and across the UK, despite being down annually.