The latest report from Haart has revealed that house prices in England and Wales in January fell by 0.5% on the month, and by 3.5% on the year with the average house price now sitting at £223,885.
According to the report, new buyer demand for homes rose by 7.8% in January, however continues to be down by a significant 37.1% on the year. Additionally, the number of properties coming onto the market this month has fallen slightly by 0.3% on the month, and 1.9% on the year. As the number of new stock has decreased, and the number of new buyers has increased, there are now 11 buyers chasing every instruction.
The market has becomes less efficient this month, as the despite a decrease in transactions, the number of viewings that took place in January has risen, meaning that buyers are choosing to view more properties before they buy.
The average purchase price for first-time buyers has fallen in January, by 3.8% on the month and by 2.1% annually. Despite falling prices, the number of new first-time buyers entering the market has risen by 10.9% on the month, however is down by 41.3% on the year.
Despite purchase prices falling, the average first- time buyers are paying for a deposit has risen by 1% on the month and 5.3% on the year.
The average property price in London has fallen this month by 1.2% on the month, however us up by 0.8% annually. On the month, the price fall in London was greater than across the country. The number of new buyers entering the market is up by 7.6% on the month, however is down by 31.6% on the year. At the same time the number of new properties coming onto the market has risen by 8% on the month, but is down 22% on the year. Sale transactions are down by 3.4% on the month, and 26.1% annually.
The number of tenants entering the market has risen by 0.1% on the month in January, however is down by 23% on the year. As supply slight increases, prices slightly drop. The average rent for England and Wales now sits at £1,354. In London, the number of new tenants has dropped by -24.6% on the month, and by 23.6% annually. The average rent in London has fallen by 0.8, and now sits at £1,856.
The number of landlords registering to buy has risen by 4.6 on the month in England and Wales, however is down by 52.7% on the year. In London, the number of registrations is down by 3.4% on the month, and by a greater 67.9% on the year. The number of buy-to- let sales is down on the month and the year across England and Wales, however has risen by 8% on the month in London. Sale prices have dropped by 3.1% on the month and 10.4% on the year in England and Wales, however are up by 4.9% in London, and down by 7.9% annually.
Paul Smith, CEO of haart, comments: “We’ve seen a New Year surge in interest from potential buyers across the country – valuations, viewings and online searches are all up significantly. This isn’t just a seasonal phenomenon. The second half of 2016 was one of subdued market activity as would-be buyers and sellers took stock in uncertain times, but this in turn created huge pent-up demand in the market which is now starting to return. However, these blatant intentions to move are yet materialise as an increase in transactions, which are still suffering on month the month and the year.
Clearly a multitude of barriers are still hindering buyers from taking the plunge and the Housing White Paper is the Government’s opportunity to tackle them. Government stamp duty incentives for downsizers and first time buyers would be an easy way to get the market moving, while buy to let demand could easily be channelled into build to rent through incentives if the government refuses to drop its stamp duty surcharge on second homes. Solving the housing crisis will take action at both ends of the property market, and failure to recognise this will see the paper stumbling before it gets off the starting blocks.
The government must be creative in its solutions and dare to think the politically unthinkable – limited green belt deregulation is a policy with the power to truly transform the supply of homes. Opportunities for radical reform don’t come around very often, and so it is crucially important that the government get this right, and let this be the hallmark of modern housing reform in the UK.”