Property Market
The general slowdown in the property market continues as we move into some of the quietest months of the year. Average UK house prices are still rising across the country, according to most of the indices, but transaction volumes and stock levels are falling.

The Halifax reports that, nationally, house prices rose by 0.4% in July to £219,266. That's 10% above their peak in August 2007 and 42% higher than their low point of £154,663 in April 2009. However, their quarterly figures also show prices fell 0.2%, there was a 3% drop in the number of sales and mortgage approvals for new purchases were down by 0.7%.

Nationwide’s rival report paints a very similar picture, with monthly growth slipping, very slightly, from 3.1% to 2.9% and transaction volumes hitting a nine month low.

Robert Gardner, Nationwide's Chief Economist, says

“This pattern looks set to be maintained in the near term. Survey data points to relatively sluggish levels of new buyer enquiries, but at the same time surveyors report that relatively few properties are coming onto the market and at a time when the number of homes on estate agents’ books is already close to thirty year lows.”

There are a number of factors behind the slowdown - there is no doubt that the uncertainty caused by Brexit has had an impact on consumer confidence, with a knock-on effect on the housing market. Payment card company, VISA, have said that consumer spending fell for the third month in a row in July - the first time it has done so in four years. At the same time, wage growth is consistently running behind inflation, leading to ever more stretched finances. Conversely, unemployment is at its lowest level since 1975, mortgage costs remain at historic lows and with new instructions falling for the sixteenth month in a row, supply shortfalls are helping to support house prices.

Amongst all this contradictory data, one of the more revealing surveys is from RICS (Royal Institution of Chartered Surveyors).

In order to get a better insight into exactly what is going on, RICS asked what people felt were the main contributors to the current flat trend. 44% identified the political uncertainty in the aftermath of the election and 27% Brexit as the key drivers of their more cautious behaviour. In London it was a slightly different story, with Brexit and the recent changes in stamp duty cited equally as the main causes.

RICS’s members also report the term ‘uncertainty’ is cropping up more and more frequently in the feedback they are receiving from buyers and sellers alike.

In other news, the government is rumoured to be considering modifying or bringing an end to the Help to Buy scheme. There has been no official confirmation, although it has already had a negative impact on the share prices of house builders. If the changes restrict the supply of new houses to the market, they could, potentially, push up prices.


Despite the usual summer slowdown, all the indices are showing signs of month to month and annual growth, albeit at low levels. There are some quite wide regional disparities, with London slipping down many of the growth tables and areas such as Birmingham now topping them.

Nationwide: July: Avge. price £211,671. Monthly change +0.3%. Annual change +2.9%
Halifax: July. Avge. price £219,266. Monthly change +0.4%. Annual change +2.1%
Land Registry: May: Avge. price £220,713. Monthly change +0.5%. Annual change +4.7%
Hometrack UK City Index: June: Avge. price £252,400. Quarterly change +3.8%. Annual change +5.1%
Rightmove: July: Avge. price £316,421. Monthly change +0.1%. Annual change +2.8% (asking prices on Rightmove)


After a period of relative stagnation, growth has now returned to the rental market. According to Homelet's Rental Index, rents rose by an average of 1.1% in July when compared to last year.

The biggest growth occurred in Northern Ireland, up +5.7%, Scotland, up 3.6%, and the East and West Midlands, up 3.2% and 2.4% respectively. In London rents fell by 0.6% over the same period, but saw the biggest monthly rise in July, up by 2.6%.

When Homelet questioned landlords about their intentions to raise rents further, 51% said they would do so in the next year or so, 17.4% weren’t sure and just 21.1% said no.

Interestingly, they also found that 84.7% of tenants said their rent levels were between very or quite affordable, 12.1% said they were quite unaffordable and just 3.2% said they were very unaffordable.

Article by Simon Cairnes



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