The latest report from estate agents, haart, has revealed that house prices across England and Wales in December fell by 1.6% on the month and are down by 3.3% on the year - with the average house price now sitting at £224,991.
According to the report, new buyer demand for homes fell by 15.1% in December, and continues to be down significantly on the year, by 38.8%. Additionally, the number of properties coming onto the market has fallen by 16.7% on the month, and by 7.5% on the year. Although there is a decrease in stock, there is also a decrease in the number of buyers, so there remained to be 9 buyers chasing every instruction in December.
The market has become more efficient this month, as the number of transactions has increased despite the number of viewings decreasing, meaning that buyers are choosing to look at fewer properties before they buy.
The average purchase price for first-time buyers has largely risen in December, by 7.6% on the month, however remains stable on the year. This has come has the rate of first-time buyers entering the market has fallen by 17.3% on the month, and by 44.7% on the year.
In line with a rise in purchase prices, the amount first-time buyers are paying for a deposit has also risen by 8% on the month, and 8.7% on the year.
The average property price in London has fallen this month by 2.5%, pushing annual growth down to 5.9%. This month’s fall is greater than the fall across the rest of the country. A fall in price comes as there is a fall of the number of new buyers entering the market, down 16.1% on the month, and 36.4% on the year. At the same time, the number of properties for sale has decreased by 17.4% on the month and by 30.2% on the year. Sale transactions have also decreased by 3.4% on the month, and by 21.9% on the year.
The number of tenants entering the market has fallen by 12% on the month, however this figure is up by 1.7% annually. A slight decrease in registrations has seen average rents reduced marginally by 1%, as they now sit at £1,334 across England and Wales. In London, demand is down by 18% on the month, however has increased by 2.5% on the year. The average rent has fallen by 0.4% and now sits at £1,853.
The number of Landlords registering to buy has fallen by 14.7% on the month, and by 51.5% annually across England and Wales. The fall is even more severe in London, which sees a 20.2% decrease on the month, and 65.1% annually. As a result, the number of buy-to- let sales has fallen on the month and the year both across England and Wales, and in London. Sale prices have also dropped, by 4% on the month and 10.9% on the year across England and Wales, and by 5.5% on the month and 20.7% in London.
Paul Smith, CEO of haart, had this to say: “A slight jump in transactions in December is definitely very promising, pointing to a cohort who have stopped sitting on their hands, brushed off their Brexit uncertainty and started to move on with their lives. Our applicant activity in the period after Christmas to date is up 5% on the year, which when considering the pre-stamp duty rush in early 2016, is very impressive. If the economy remains sound, renewed interest should translate into higher transaction rates in 2017.
It is certainly time we all moved on. The idea of Article 50 holding up someone’s decision to buy or sell a home is ridiculous nearly a year on from the referendum, especially as the economy has remained so robust. Prices cooling down is a good thing for buyers – now is a great time for them to get a good deal.
However, the government can undoubtedly do more to help the property market in 2017. Clearly there are no signs of a cease fire on the ‘War on Landlords’ with a fresh new plan to introduce
England’s second home stamp duty surcharge in Wales – and no sign of scaling back the damage felt by landlords in England. The government has even wobbled on the publication of the Housing White Paper, which should have been driving force of fresh new incentives to get housebuilders building, and this points to a government with a lack of a coherent strategy to help solve the housing crisis. It is crucial that the government get this right. We need to look at more creative housing solutions in 2017, clearly the current shortage is not sustainable, and more thinking outside the box is needed to get first time buyers into the homes they so desperately want.”