UK property market activity slows, but prices outlook improves
The UK’s residential property market is continuing and properties are being bought and sold. Some areas are experiencing price declines – albeit generally minor ones – while other regions are seeing, again quite mild, price rises. But, what many regions do have in common, is that the number of properties available for sale is very, very low.
The latest housing market survey from the Royal Institution of Chartered Surveyors (RICS) stated there was a record low average number of properties for sale across the UK during February. That average was just 42 per estate agency.
“The UK housing market is pretty quiet right now, as a number of details combine to prop up prices at elevated levels while limiting potential home-buyers’ ability to save the still large deposit required to buy a home in the UK. A lack of property for sale is one of the key reasons UK house prices are still so high and that’s unlikely to change anytime soon, despite Government proposals and plans.”
Fewer homes for sale, fewer interested buyers
The RICS report also shows that buyer interest remains subdued. Again, this is likely partly related to the still high level of property prices across many UK regions.
However, there are some exceptions. Activity has improved in the Scotland, Northern Ireland and Yorkshire and the Humber in northern England. But, as prices tend to be lower in those areas, on average, that likely explains why.
Overall, the survey shows that despite little interest from buyers in most UK regions and few properties for sale, prices are still being supported and even rising a little. That’s a strange mix as a lack of demand for something typically pushes the price for it lower.
However, the lack of property across the UK as a whole is working to keep house price levels either flat or a little higher.
Central London estate agency, LDG said:
“The level of demand for property is generally a key driver as to the value of it, but at a time when UK property levels are simply too low after years of too little construction activity, those laws of demand aren’t working as well as they usually do.”
Upside seen ahead of UK house prices
Amid the current UK housing market dynamics, lack of interest, Brexit uncertainty, too few homes and not enough for sale, surveyors are still anticipating house prices could rise by some 15% in the next five years.
That rate of growth is well below the annual double-digit gains that were experienced in the nineties and noughties. However, at a time when the average UK house price is expected to rise by no more than 1% in 2018, an average gain of 3% over a five-year period is likely a welcome outlook for many home-owners and property investors.
It’s likely less welcome by those would-be buyers who are still saving up their deposit to make the purchase of their dreams.
Newington Green estate agent, M&M Property said:
“It’s very possible that UK house price growth could recover to a level that would please home owners and investors, but, that outlook – that changes month-to-month – shouldn’t stop you from continuing to save for your first home,” “Things can change unexpectedly and quickly and if something happens to dramatically alter that view, you could be a great position to make a purchase – provided you stick with your plan, regardless.”
Kindly shared by Property Division