Buyers continue to return to the market, but over supply of properties causes prices to continue to fall.
House prices have now been decreasing for the past ten consecutive months. Despite the continued house price falls, the last four months have seen reducing price falls suggesting the market is stabilising. Prices now stand at £162,100, down from a peak of £167,700 in June last year.
In contrast to lacklustre price changes, activity has increased again this month. Sales agreed have risen 9.4% (16.5% in March’s survey). This is partly due to ongoing increases in the number of buyers registered since the beginning of the year totalling 27.3%. Even though buyers have been returning to the market, the back log of properties registered with estate agents means there is still a considerable oversupply.
This explains why despite there being more buyers in the market, they are still negotiating discounts of over 6% on asking price. This month’s average sales price as a percentage of asking price has decreased slightly to 93.3% (93.4% in March’s survey).
The amount of time it takes to sell a property remains stable at 7.4 weeks this month, but the average number of viewings per sale has decreased to 12.4 (13.2 in March’s survey) suggesting buyers are not holding back as they have been previously.
27 counties have seen price rises or remained static this month, and 31 have seen price falls. The counties at the top end of the scale are Central London & City (0.6%), West Midlands (0.6%), Dorset (0.5%), London – North (0.3%) and Wiltshire (0.3%). The counties reporting the largest price falls are Bedfordshire (-0.7%), Gloucestershire (-0.5%), Surrey (-0.4%), Oxfordshire (-0.4%) and London – East (-0.4%).
Of the cities, 32 have seen price rises or remained static whereas 22 saw price falls. The top five are Bournemouth (2.1%), Coventry (1.7%), Winchester (0.7%), Hull (0.2%) and York (0.2%). The cities reporting the worst falls are Milton Keynes (-1.7%), Lancaster (-1.3%), Cheltenham (-1.2%), Southampton (-1.0%) and Canterbury (-0.8%).
John Wriglesworth, Hometrack’s Housing Economist, comments: “The forthcoming election, a change of pope and a newly married heir to the throne have done nothing to improve the housing market which remains in the doldrums. Despite buyers returning to the market, there continues to be an excess supply of unsold properties.
“Election jitters are not helping, but this is only temporary. Post election, whichever party wins, there is likely to be a bounce back in the market, as the economic and political prospects become more certain, thus encouraging consumer confidence to return. Interest rates, which may rise after the election, are expected to remain historically low, as with unemployment, despite Rover’s collapse. Mortgages are still very affordable, and incomes are continually rising. There are no fundamental reasons why the market should not recover, confidence is the key. We continue to predict 3% house price inflation for the year.
“The Conservative party’s announcement of their intention to scrap stamp duty below £250,000 is helpful but not significant. It will only take 1% off house prices, which in the context of rises of nearly 100% over the last five years, is akin to taking a snowflake off an iceburg. However, for first time buyers particularly, it is a good psychological boost so is to be commended.”
