The housing market has slowed down significantly. The Royal Institution of Chartered Surveyors (RICS) has reported that whereas last year a home typically took 16 weeks to be sold, the average time is now about 18 weeks. June was the 16th successive month of decline.
While people may be experiencing difficulties in selling their houses, the flip side for those buying a property is that house prices haven’t been rising. This is good news for first time buyers in particular.
According to the Halifax, the UK’s largest mortgage lender, in the year leading up to June 2018, house prices rose at their slowest pace since March 2013 with an increase of 1.8%. The Office for National Statistics reported that annual house price growth fell to 3% in May compared with a month earlier. London property values were responsible for dragging down the rate of growth across country, which was the fourth month in a row of falling house prices for the capital. It was a more positive story for the East Midlands which showed the highest annual growth with house prices increasing by 6.3% over the last year. The slowest increases in house prices were in the north-east of England with prices rising by just 1.3%.
The report also showed that the number of properties estate agents had on their books was at an all-time low. The market appears to be reaching stagnation point. It’s not just properties for sale that are affected either. The rental market is affected too, with many landlords abandoning it as a result of tax changes, such as the stamp duty surcharge. This has hit buy-to-let investors and second-home owners particularly hard.
Simon Rubinsohn, chief economist at RICS, commented that, “It is hard to see what is going to provide much impetus for activity in the housing market in the near term.”
There has been speculation by analysts of a potential interest rate rise this summer. This has contributed to an increase in the number of mortgages being processed. According to UK Finance, the number of new home loans hit its highest monthly total in May. Estate agents feel, however, that this would just have an even more negative effect on the already fragile confidence that exists in the market.