Surveyors are reporting the fastest drop in transactions since 2008, but there is little consensus over whether this is caused by the Brexit vote or the aftermath of the Stamp Duty rush.
The RICS residential market survey for July found 34% more respondents reported a fall in transactions for the second month in a row when 45% more reported a decline.
Just 5% more respondents nationally saw a rise rather than fall in prices and 12% more predicted a decline in the next three months. In London the net balance of those seeing a rise in prices was minus 33%.
The results showed a fourth consecutive month of falling demand with a net balance of -27% seeing a drop, while 33% more respondents to the survey have seen a fall in new instructions.
Anecdotal reports provided by contributors to the survey suggest both the Stamp Duty tax change and the ongoing fall-out from the EU referendum are contributing to the current mood in the market.
However, others commented that after an initial Brexit vote wobble, activity has returned to normal.
On a more positive note, over a longer 12-month period 13% more anticipated sales growth and house prices were expected to rise close to 3% a year over five years.
Simon Rubinsohn, RICS chief economist, said: “The housing market is currently balancing a raft of somewhat mixed economic news alongside the latest policy measures announced by the Bank of England, which have already begun to lower cost of mortgage finance.
“Against this backdrop, it is not altogether surprising that near-term activity measures remain relatively flat.
“However, the rebound in the key 12-month indicators in the July survey suggest that confidence remains more resilient than might have been anticipated.
“Critically, it is hard to escape the stark message regarding supply that is evident in the latest set of results with RICS data showing inventories on agents’ books around historic lows on average. This is a long-running story that may have been exacerbated by recent events but clearly needs urgent action from the new government.”
However, in a raft of other reports on the housing market, Jackson-Stops & Staff and haart have both slammed scaremongering and have individually reported more positive news.
This morning, however, LSL said it could not be sure of the effects of Brexit, while CML said that in the run-up to the referendum, there were more first-time buyer mortgages than for almost nine years. See next stories.
Comments (11)
Let’s face it, surveyors a gloomy souls.
Often sat by themselves at the office party or wandering around amelessley jangling the change in their pockets.
Pethaps a cup of tea and a bun are in order – that might cheer them up 🙂
Every time something “happens” the psyche of the UK population is to batten down the hatches.
I voted to remain in the EU mainly because I have a family to feed and my worry is not house prices but volumes of sales.
I work in a clearly defined postcode with most sales spread between 6 main agents.
Since the vote, the number of sales in my area has gone from 98 (24th June 2015 – 10th August 2016) to 85 this year for the same period.
That’s a drop of 13.2%.
Now, Rightmove Intel only goes back 14 months so I couldn’t check against 2014, but for H1 completions it’s as follows:
2016: 192
2015: 231
2014: 239
You can see the stamp duty bump in March and the resulting dip in April.
The long term average (back to 1995) is 266.
The pre-credit crunch average is 321. The post-credit crunch average is 188.
So, in my area we are just about an average year in the “Post Credit Crunch Era” – yay!
But we are down on last year and down on the year before by nearly 20%.
And we are a whopping 40% lower in terms of transactions than before 2008 (on average).
I don’t know about you guys but I hate “the new normal”.
BTW, just to clarify that’s figures for my whole postcode – in case my boss is worried I’m leaking company secrets!
😉
You may find that is much the same story around the county. Stock has been dwindling year on year for many reasons but lenders criteria and property values, has yet to get over the 2008 crunch. In simplistic terms doubled property prices requires double the income. Average Joe& family is the benchmark and they are still short on income till after 2020?
Blimey….its ground hog day!
Well… he certainly knows how to hog column inches, wardy!
Let the fun begin… ;I)
It’s clearly obvious that new and better marketing methods are urgently needed across the whole estate agency profession if these sorts of sudden and unacceptable slowdowns in sales are to be avoided. Not doing this is highly unsatisfactory for stimulating growth in our national economy.
For full details about what needs to be done to effect such a change, please refer to my already fairly well-known article:
http://www.improvethehousingmarket.co.uk
Why, HEEEEELLLLO, Mr Hendry!
Wounds all healed now, I take it?
Seconds out… let’s get ready to rumble!
friendly warning – watch out for the sucker punches – you’ve been caught by far too many already…
I take it this is the usual Peter Hendry M.O.
Drop in – chuck a damp squib into the room and run away chuckling like a naughty schoolboy and not return for a couple of days “…because he’s busy elsewhere…”
That’s fine, Mr H. You take your precious time on this one. Best not rush at it. Collect your thoughts.
When you think you’re ready – we’re ready.
Then – and only then – will you find out just how unready you actually were…
In case you’re still wondering I’ve said everything I needed to say right now.
Yeah – like you’re going to leave it at that chunk of MDT…