Slowdown? What slowdown? UK property prices climbing
Fears of a UK property slowdown seem to be unfounded as data shows sales and year-on-year price rises are stronger than ever, and a national average rise of 5 percent.
Compared to this time last year - which was just after the Brexit vote - the number of buyers and sellers in the market have increased, pushing the number of sales up by 4.6 percent over June 2016.
At the same time, cumulative sales agreed so far this year are almost level with the same period of time last year, down by just 0.4 percent - although sales during the first six months of 2016 were boosted by buyers rushing to buy ahead of April’s 2016 stamp duty deadline.
Any wobbles in the market are currently being righted by other factors, such as low interest rates, low unemployment and the ever-present UK phenomenon of low supply and high demand.
Summer is traditionally a quiet time for property sales, as buyers and sellers take their holidays, leaving property transactions for the cooler months. This seasonal slowdown means the overall market rose by just 0.1 percent last month.
Despite the UK’s average asking price for first time buyers dropping by 1.7 percent since last month to £196,000, this figure is still 3.8 percent higher than this time last year. All regions across the country have seen price rises over the past year, the average rise of 2.8 percent pushing the overall average UK property price to £316,000.
The low supply of homes on the market was backed up by a survey from the Royal Institution of Chartered Surveyors last week, which reported that the number of properties per real estate agency branch dropped to an all-time low in June, at just over 42.
Mert M Altinisik, head of sales at Property UK, said these factors point to a consistent market.
“It seems that the buyers who took a wait-and-see approach with the UK election are now returning to the market, which is really encouraging news for domestic and overseas buyers wanting some assurance along with their purchase.”
Mert added that some of the best growth is being seen outside London, which has traditionally been an investor favourite.
Prices in the capital are still twice as high as the UK average, at £481,345. London’s most expansive borough remains Kensington and Chelsea, where a property will set you back by an average of £1.5m. Buyers in this area would need a deposit of £450,000, based on a 70% mortgage.
However, a consultant from Pantheon Macroeconomics predicts that annual price growth will slow to 1.5 percent by the end of 2017.
“Lenders are reporting that they will lend less in the third quarter and the recent pickup in wholesale funding costs suggests that they will not continue to cut mortgage rates. Meanwhile, the recent deterioration in consumer confidence, largely in response to the intensifying squeeze on real incomes, has made households less willing to make big ticket purchases.”
Property in the UK has always been in high demand, and both sellers and buyers will be watching eagerly to see which prediction pans out.