The latest report from Home.co.uk claims that overcautious buyers and sellers risk bringing the market to a standstill.
The crisis of confidence appears to have hit the capital the hardest. Brought on by Brexit uncertainty, where lack of demand means the Typical Time on Market for unsold property has soared by 23% and at the same time, vendors’ reluctance to commit has meant that supply has dropped 28% year-on-year.
Home.co.uk, reports that market pessimism is widespread and Brexit uncertainty, combined with the post-boom malaise, continues to hamper property sales. Meanwhile, home prices appear to be hovering for the time being, while both demand and supply shrink.
Negative sentiment is increasing and has acted to apply the brakes to the normally surging late spring property market, as evidenced by Typical Time on Market figures which are longer in every single English region and Wales and Scotland. A wait-and-see attitude is stifling both supply and demand. So far, these exceptional strains on the market have had little net effect on the established pricing trends but home values appear to be levitating, based more on aspiration than any real underlying market fundamentals.
Overall, annualised price growth in England and Wales remains just in the red at -0.2%, despite a month-on-month rise of 0.5%. Spring optimism has managed to lift prices in all the English regions, Wales and Scotland, although this appears to be driven by wishful thinking on the part of a reduced number of vendors rather than by demand, as properties spend longer and longer on the market.
London’s annualised losses have notched back again slightly from 3.1% to 2.9% and now total 6.7% since the start of the price decline in May 2016. Asking price falls in the South East continued to ease (now 1.5% year-on-year) but worsened in the East (3.0%), where the post-boom price correction is fully underway.
Overall, supply of property for sale entering the UK market is down by 9% while the total stock for sale has increased by a mere 1.7% year-on-year, as an increasing number of vendors withdraw from the sales market altogether (up 6.5% year-on-year).
In May 2018, the annualised rate of increase of home prices was 1.1%; today the same measure is -0.2%.