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UK property market remains subdued but growth expected in next year

Residential property sales remained subdued in September and buyer demand and supply slipped into negative territory, the latest industry housing market survey shows.

New instructions across the UK reached its weakest in three years and buyer enquiries have fallen as uncertainty deters house purchases, according to the report from the Royal Institution of Chartered Surveyors (RICS) but it still expects prices to rise at a national level over the next year.

It says that much of the anecdotal commentary from the survey respondents working in the market blames heightened economic and political uncertainty and the market seems unlikely to gain impetus over the next three months, though sentiment for a year ahead is more resilient.

In September, following three consecutive months of a stable trend, a decline is reported in home listings coming on to the housing market. Comments from contributors are suggesting that the Brexit impasse is dissuading vendors. The new instructions net balance fell to -37% in September, the weakest reading since June 2016.

Average stock levels on estate agents’ books, unsurprisingly therefore, remain near record lows. As contributors are reporting that appraisals are down compared to a year earlier, there is little prospect of a pick-up in the immediate future.

Alongside this, a more cautious approach from buyers is visible in the September results. After holding steady in the last four months, the new buyer enquiries net balance fell to -15%. In keeping with this, newly agreed sales fell, with a net balance of -27%, from -11% previously, with activity reportedly slipping in virtually all parts of the UK.

As far as the near-term outlook is concerned, sales expectations stand at -9%, suggesting sales will remain subdued in the coming three months.

The headline price balance sees a flat trend in house price inflation. However, there is once again a mixed picture across the UK with negative momentum in London and the South East, and solid gains in Northern Ireland, Scotland and the North West.

Looking ahead, price expectations for the coming three months stand at -16% pointing to a modest decline on a UK wide basis. However, the 12 month outlook points to a turnaround, with 18% more respondents expecting prices to rise rather than fall over the coming year.

In the lettings market, the latest set of results see demand from prospective tenants rising firmly for an eighth month in a row. Alongside this, landlord instructions remain in decline. With demand still outstripping supply, rent expectations for the coming three months remain positive at a net balance of 24%.

‘There are good reasons for thinking the latest dip in both buyer enquiries and vendor instructions is a response to the endless wrangling about Brexit, as the October 31st deadline approaches,’ said Simon Rubinsohn, RICS chief economist.

‘Indeed, much of the commentary from respondents based further away from London and the South East remains relatively sanguine, which is also reflected in some of the metrics capturing expectations. However, unless there is a speedy resolution to the ongoing impasse it does seem inevitable that the stand-off between purchasers and sellers will deepen making it harder to complete transactions,’ he explained.

‘This will not only be a direct hit on the housing market itself but could have ramifications for the wider economy as the normal spend on furniture, fittings and appliances that typically accompanies a house move is also put on hold,’ he added.

Source: Property Wire

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Property sales fell considerably in July, official figures show

Residential property sales have fallen considerably in the UK, with official data showing a fall of 8.5% month on month between June and July and a year on year decline of 12.4%.

The data from HMRC shows that overall there were 86,630 residential sales and 9,760 non-residential sales in July 2019. Non-residential sales also fell, down by 2.8% on a monthly basis and 5.8% lower than July 2018.

The figures suggest that there are a number of barriers preventing people from buying and Kevin Roberts, director of the Legal & General Mortgage Club, believes that it is not just Brexit.

‘While Government schemes have helped thousands of first time buyers onto the property ladder, we need to think about those further up the ladder too. To stimulate the market, the Government needs to build more housing across all types of tenure. This will provide second steppers and last time buyers with more choice and in turn, families can up or downsize accordingly,’ he said.

But it could be the usual summer slump exaggerated by Brexit uncertainty, according to Marc von Grundherr, director of Benham and Reeves. He also thinks sellers are reluctant to accept lower prices.

‘Although mortgage affordability remains fairly good, the huge stamp duty costs facing many buyers will do little to stimulate demand at the other end and continue to act as a financial anchor for those looking to climb the ladder,’ he explained.

But Joseph Daniels, founder of modular developer Project Etopia, does put the blame on Brexit. ‘Brexit has cemented caution into the attitudes of buyers and sellers and the sales slump is all but nailed on now until the political uncertainty settles down,’ he said.

Neil Knight, business development director of Spicerhaart Part Exchange and Assisted Move, believes it is more complicated than that. He pointed out that the figures follow the recent construction output figures which showed that overall construction output dropped by 1.3%, and the UK Finance mortgage trends report which showed levels of remortgaging, home mover mortgages and first time buyers all fell in June.

‘It feels like a fairly gloomy picture for the housing market. However, when you take into account that the drop in construction output was mainly driven by a 6% decline in private housing repair and not new housing and that while nationally, mortgage transitions are down, actually, when you look at a regional picture, it is only London where the market is struggling, it paints quite a different picture,’ he said.

He also pointed that the latest figures from the National House Building Council show that builders and developers registered the highest number of new homes for 12 years during the last three months.

‘These figures tie in much more with what we are seeing. While overall, the housing market may be subdued, the new homes market is much more buoyant. At Spicerhaart Part Exchange and Assisted Move, we are busier than ever, working with developers across the UK to offering part-exchange and assisted move services. We are being led to believe that the house building industry as almost ground to a halt, but that is simply not true,’ he added.

‘The demand is there and the activity is too and it is great to see such confidence in new-build housing despite uncertain economic and political times. Let’s hope it filters through to the rest of the market,’ he concluded.

Source: Property Wire

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Property sales bounce back in all but one UK region as first-time buyers replace investors

Residential property transactions rebounded in most UK regions during February, HMRC data shows.

The taxman’s UK Property Transaction Statistics for February 2018 shows 83,230 sales last month on a non-seasonally adjusted basis.

This is an improvement on the 81,580 recorded in January and reverses two consecutive months of falls.

England saw a 3% increase on a monthly basis to 72,140, while Wales was up 1.8% to 3,790.

Northern Ireland saw a 14% jump to 1,950, while Scotland was the only region to see a fall, down 14.2% to 5,350.

However, on a seasonally adjusted basis, HMRC says the transaction figures are down 0.3% on a monthly basis to 101,010, down 0.7% annually.

Brian Murphy, head of lending for Mortgage Advice Bureau, said: “What we can interpret from the statistics is that the housing market is continuing on a steady course, with transaction numbers broadly unchanged on the previous month and only very slightly reduced on the same time last year.

“This underscores industry forecasts that the market will continue to perform at the same level this year with a relatively steady number of transactions at a topline level, although the mix of buyers is changing as we see fewer investors, but the slack being picked up at entry level by first-time buyers.

“Having said that, as we continue to see a diverging regional picture with some areas experiencing a significant upturn in buyer activity, this overall trend masks the fact that some towns and cities have seen higher than anticipated levels of buyer activity in the first two months of this year.

“This ‘two tier’ market is therefore propping up the more subdued levels of activity in London and the south-east, a reversal of what we’ve seen in previous years, and potentially an indicator of what we may see over the course of the next few months.”

* However, haart’s monthly report found that transactions were down in February.

The agency said that buyer demand surged 20% last month and was up by 14% on February last year.

It also reported a rise in viewings and a 15% increase in transactions in London.

But transactions generally across England and Wales were down, however, by nearly 7% on the month and by 3% year on year.

Haart also says that house prices at exchange are down 2% on the year.

All the figures are from haart’s own network of some 100 branches in England and Wales.

Source: Property Industry Eye

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Property sales in UK confirm housing market is moving ahead steadily

Residential property sales in the UK increased by 1.7% between September and October 2017, some 9.2% higher than the same month in 2016, official figures show.

The data from HMRC also shows that there were 105,260 residential property sales and 11,280 non-residential sales.

It is more evidence that the property market is progressing at a steady pace despite political and economic uncertainty and the decision to leave the European Union with Brexit having no impact.

Stephen Wasserman, managing director of West One Loans, pointed out that stamp duty hikes have had more of an impact on the housing market and believes that further change to the property tax paid by buyers could boost the market.

‘The uptick in property transactions demonstrates the underlying stability of the sector, and is a positive message to the market ahead of Wednesday’s Budget, which is expected to be largely housing focussed,’ he said.

‘It will take some time for the market to fully recover from the upheaval of stamp duty hikes and economic uncertainty caused by Brexit negotiations, but if Hammond scraps stamp duty for first time buyers, as it’s rumoured he may do so, we could see the market grow at a faster rate,’ he added.

According to Shaun Church, director at mortgage broker Private Finance, while there have been no impressive monthly increases in the number of property transactions this year, annual comparisons are favourable. ‘Transaction levels are also now back to where they were before the stamp duty changes which came as a shock to the system in 2016,’ he explained.

‘High demand for housing and low mortgage rates will continue support activity in the long term, but for a markedly improved performance next year issues surrounding property supply and the stamp duty system must be addressed. The industry will be hopeful that tomorrow’s Budget unveils decisive action on these two fronts,’ he added.

Source: Property Wire