Housing Stock in the UK drops heavy as buyer demand wanes

The average number of properties on estate agents’ books has hit a record low and is most unlikely to improve, according to a survey by the Royal Institution of Chartered Surveyors (Rics).

While a typical estate agent has 42 homes on their books per branch, in London – where the nation’s chronic housing shortage is most concentrated – the figure is just 33.

Rics’s monthly residential market survey, which gathers the views of more than 300 chartered surveyors across the country, also found that there was a prevailing trend in the lack of new buyer enquiries, new instructions and newly agreed sales.

New buyer enquiries fell for the eleventh consecutive month, with 16pc more survey respondents seeing a fall rather than rise in new customers, while the number of agreed sales was also down, continuing a six-month trend.

Buyer demand has fallen most dramatically in London and the south-east, Rics said, while it has risen in Scotland, Northern Ireland and Yorkshire and the Humber. Figures in most other regions remained broadly flat.

As market activity continues to slow, prices remained flat in February for the ninth month in a row, although there was an uptick in headline prices in Wales, the north west, Northern Ireland and the East Midlands.

Rics said the five-year indicator for house price growth will be approximately 15pc by the end of the 2023.

Simon Rubinsohn, Rics chief economist, said: “The divergent regional picture is becoming increasingly pronounced with key Rics indicators across huge swathes of the country still showing considerable resilience, but data for London, the south east and East Anglia are rather more subdued.”

Russell Quirk, chief executive of online estate agent Emoov.co.uk, said that it was important to note that only a “tiny proportion” of Rics members were actually estate agents and so their views “aren’t entirely typical of the overall industry”.

Earlier this week Theresa May said young people unable to climb onto the property ladder had a ”right to be angry” and that developers were partly to blame for the nation’s chronic housing shortage and other property issues.

Announcing reforms to planning rules, the prime minister said developers had a “perverse incentive” to hoard land once it had been approved for development rather than actually build on it, meaning much-needed houses were not being built. She added that they should step up and “do their duty to Britain”.

Previous research has suggested that more than 423,000 new homes in Britain have been granted planning permission but are still waiting to be built.

Councils are approving nine in every 10 planning applications, but sites are being left empty as developers fail to build quickly enough, and councils are unable to step in.

Brian Murphy of the Mortgage Advice Bureau said that it “stands to reason that if fewer properties are on the market for sale, buyer choice is restricted”. He said: ”This means that those who are actively looking are likely to view fewer properties, hence why we would see a reported reduction in new buyer enquiries.”

Property market news – what does 2018 have to offer.


This week’s Property News article is presented by The Property 

As property market news for the new year sheds light on what to expect in 2018, an unusually conservative assessment emerges from Halifax that demands attention.
UK lender Halifax published a pretty pessimistic outlook for UK house price growth, putting a dent in the stocks of housebuilders and an uncertainty as to what your house is worth. While this was not completely unexpected, it marks a worrying time for those with a stake in the property market, as the period of uncertainty for Great Britain after the Brexit referendum continues to bite away at people’s pockets, making getting an accurate house valuation all the more difficult.

A solemn foundation for property market news in 2018?

If this is your first visit to our site, know that the readings of the UK housing market we have come to expect from Halifax are usually rather more optimistic. But they have said that property prices over the last three months of 2017 rose by just 2.7%, compared to that same three-month period back in 2016. That’s a drop from the growth of 3.9% in November, and the 4.5% recorded in October. The latest reading fell short of forecasts significantly; analysts in the Reuters poll were predicting a growth of 3.3%, so growth has slowed noticeably. This is a trend that suggests the uncertainty after Brexit is damaging property values.

There is still uncertainty of what is going to happen now that Britain has voted to leave the EU. (Read more about Brexit from the Daily Express – click here) Uncertainty following Brexit also extends to the UK Property Market. Mark King Properties, (South Wales based property investor) explores this issue and the effect it may have on house prices in more detail, click here to read the article.

Reflecting on property values, prices actually fell by around 0.6% in December, which was the first downturn since June of 2016, according to Halifax. As property market news goes, this is not the way many would have hoped things would be going into 2018.

Analysing the figures, the managing director of Halifax Community Bank observed that the pattern of the housing market in 2017 was similar to that of the year before. There was a slow in the growth of house prices, even in the south-east, and a distinct flatness to all building activity, sales completed and approved mortgages for purchasing a house. He attributed this pattern to an observed squeeze on the real growth of earnings and the ongoing uncertainty about the future of the British economy.

What he did predict, however, is that house prices in 2018 will probably be supported by scarcity – few properties for sale, housebuilding at low levels, high rates of employment and low-interest rates that will promote the servicing of mortgages. The forecast stands at a predicted growth in house prices in the 0-3% range when we reach the end of 2018. So if you’re asking the question “What is my house worth?”, you may not need to fear a drastic plummet in prices in these uncertain times.

Currently, the average price of a UK house stands at £225,021, with prices in London typically topping the scale. Analyst Sam Tombs from Macroeconomics commented on the data released by Halifax showing house price growth slowed. He said that it shows how the recent rise in new mortgages has had a dampening effect on a property market that was already showing signs of price rises flagging. The Halifax index had been indicating a rise of 3.6% from June to November; a strength that had not been reflected by other indices. In Tombs’ opinion, a correction was well overdue.

Tombs went on to say that he expects the recent reforms made to the stamp duty rules for first-time buyers, as well as the ongoing shortage of existing homes being put on the market, should ensure a stabilisation of house prices in 2018. In other words, he doesn’t expect there to be an outright fall in the value of properties through 2018, despite the uncertainty of the Brexit negotiations.

With this property market news entering the public realm, it was no surprise to see that shares in housebuilders saw some of the biggest descents on the London stock market at the start of the second week of January 2018. Barratt Developments and Taylor Wimpey were the leaders in the sector lower, both going down by 1%. Closely following were Persimmon, who saw a fall of 0.9%.

As the year continues, we can only wait and see what property market news unfolds, but the outlook is a cautious one for anyone for people hoping to profit from the sector. These are uncertain times in Britain, and the property market is not immune to uncertainty.


2018 Property hotspots for first-time buyers, from Surbiton to Sydenham and Gidea Park

With the recent elimination of stamp duty for property up to £300,000 is a valuable reduction in start-up costs for buyers already struggling to raise huge deposits.

With the continued growth in the number of house builders getting the Help to Buy London scheme, this allows first-time buyers to pick up a new flat with only a five per cent deposit.

These changes will not solve London’s housing crisis. The huge gap between wages and house prices remains. But for those who are in the lucky position of being able to buy in 2018, there are still pockets of cost-effective housing in the capital.

According to Paul Money, branch manager of Beresford: It’s not too late to get in on the Crossrail action.

He believes the leafy Thirties suburb of Gidea Park, on the Essex borders, is a great place for first-time buyers.  You could pick up a three-bedroom semi for about £400,000, or a two-up two-down cottage for £325,000-£350,000. Two-bedroom flats cost between £280,000 and £320,000, and one-bedroom flats start from about £220,000 to £250,000.

Even though it may be affordable but Gidea Park will be too suburban for some. Its high street has suffered from proximity to the large shopping centers Westfield Stratford City, Lakeside, and Bluewater. While nightlife is limited to some good old-school pubs. On the other hand, it is pleasantly leafy, with a golf club and Raphael Park, and has a safe, affluent sort of vibe.

South-east London has been attracting many first-time buyers over the last five years, catapulting areas including Hither Green and Crystal Palace from anonymity to desirability.

Rory Cramer, head of the consultancy at Marsh & Parsons New Homes, believes the next area to surge will be Sydenham, where the average price of a flat currently stands at £366,000.

“It’s a true gem of an area and often overlooked,” he says. “With trains into London Bridge in 16 minutes, large green open spaces and independent coffee shops and restaurants, it’s no surprise that prices have increased 16 percent on the same time last year, making it a great investment opportunity.”

Expect to pay about £400,000 for a period conversion, or if you want a new build, Cramer recommends the Dylon Works development where you could use Help to Buy London to pick up a one-bedroom flat for about £379,000.

Surbiton may be in  Zone 5, but it is a ridiculously quick commute. Mainline services take from 19 minutes to reach Waterloo, which makes it faster to central London than living in most of Zone 2.

Property ranges from grand Victorian villas and conversion flats to Art Deco apartment buildings and 20th-century semis. Surbiton’s main shopping street is Victoria Road, which has a comprehensive if not the particularly exciting range of supermarkets, shops, and chain restaurants.

More exciting is Maple Road, where independent restaurants and cafes are opening up: this is becoming the go-to spot for buyers heading out of more central areas.

“The stylish Maple Road area is highly desirable for thirtysomething professional couples – a slightly younger demographic than Kingston, which is much more family orientated,” says Edward Gray, managing director of Cocoon estate and letting agents. “It has a range of high-end restaurants, eateries, bars and quality pubs, all within a short walk of the Thames towpath, including the very popular No97, a restaurant and gin bar.”

First-time buyers could get a flat in this popular area from about £450,000 or a Victorian terrace from about £600,000. For buyers on a tighter budget, a two-bedroom flat in a Sixties building would start at about £375,000.

Gray particularly tips Surbiton for future potential. If the proposed Crossrail 2 project goes ahead prices could soar – although buyers will need the patience to benefit since the line won’t be operational until the 2030s.