In some parts of the country the typically busy spring market is on hold, weighed down by Brexit uncertainty, according to the latest findings from Rightmove.
The average price of property coming to market has risen just 0.4% (+£1,287) this month, the lowest average monthly growth at this time of year since 2011, and significantly lower than the 0.9% average over the last seven years.
With the number of sales agreed by estate agents also dropping below this time last year, Rightmove said Brexit uncertainty has at best delayed the usual spring bounce.
“While March marks the start of spring, temperatures have yet to rise in the housing market,” Miles Shipside, Rightmove director and housing analyst, said. “Buying activity remains cooler than usual, with hesitation as some buyers await a more settled political climate.”
He said there was greater resilience the further away you get from the London market, with a sound bedrock of demand for the right property at the right price, 'reinforced by ongoing housing needs combined with cheap mortgage borrowing'.
London remains the main drag, with nine out of 11 regions in the capital still seeing new-to-the-market sellers pricing higher than a month ago. Prices in the capital are also down by 1.1% on the previous month, with the North East the only other region to record a monthly fall, down by 1.3%.
Their pricing histories, however, are very different, with London prices still 68% higher than a decade ago and buyers looking for prices to settle at a new level of fair value. By contrast, the North East has witnessed new seller asking prices go up by just 8% in the same time-frame.
“London and some of its commuter belt are suffering from a post-boom hangover, with prices now having to be far more sober to attract buyer interest,” Shipside continued. “In contrast, North East prices never had the opportunity to become intoxicated by the capital city’s heady mix of high demand, low interest rates and higher salaries.”
With the clock ticking down towards the Brexit deadline (although the current turmoil and chaos in Parliament is putting this date in some considerable doubt), it is perhaps unsurprising that many buyers are taking a hesitant approach. The number of sales agreed by estate agents in February was 7% lower than the same period in 2018, while there was a year-on-year fall of 4% recorded in January.
Despite this, search activity on Rightmove remains steady, with the number of visits to the property website staying level in the year so far.
This suggests that many home-movers are keeping a watching brief, which could lead to an eventual bounce if and when the uncertainty subsides.
“The closer you get to the wire without the clarity of an agreed way forward, the greater the propensity for buyers to wait and see rather than acting now,” Shipside added. “This could be a temporary pause, and indeed market slowdowns at election time and around the original referendum result bounced back pretty quickly.”
While he said markets and people do not like uncertainty, and sales agreed numbers are down by 7%, that means they are still running at 93% of last year’s levels.
“Most potential buyers are getting on with their lives or seeing a price lull as an opportunity to get onto the housing ladder or move to the next rung, with average national asking prices being 0.8% cheaper than a year ago,” he concluded.