Demand for UK housing is now at a two-year low, according to estate agents.
Estate agents reported a large drop in demand for housing in April, with the number of house-hunters registered per branch at the lowest level since March 2014, reveals the National Association of Estate Agents.
There were 325 house hunters registered per member branch on average last month – the lowest number recorded since March 2014, when there were 313 house buyers recorded at each estate agent branch. This means demand has decreased by one-fifth (22 per cent) from 417 in March.
Last month, the supply of houses available for buyers also decreased by a third (35 per cent) – from 54 properties available in March, to 35 in April.
Mark Hayward, Managing Director of the NAEA, comments: “It’s no surprise that demand dropped significantly in April. Eight in ten (80 per cent) agents saw an increase in purchasers trying to beat the buy-to-let stamp duty changes before the April 1st deadline, so we expected to see a slow-down immediately following the deadline.”
One in four (26 per cent) of the total sales made in April were to FTBs, a decrease of two percentage points from March. However, one in three (33 per cent) estate agents expects sales to the group to increase following the buy-to-let stamp duty changes, as buy-to-let landlords exit the market, potentially freeing up properties for FTBs.
UK housing demand dips following stamp duty surge
12th May 2016
Interest from UK house buyers has dipped for the first time in a year, following a surge in activity to beat April’s stamp duty deadline.
The latest market survey from the Royal Institution of Chartered Surveyors shows that demand UK house-hunters fell for the first time since March 2015.
22 per cent more chartered surveyors reporting a drop in demand. While many are placing a lot of weight on the uncertainty surrounding the UK’s looming referendum on the EU, though, April’s slowdown was also expected, due to the number of investors bringing forward their transactions before the new surcharge on second home purchases.
Sales are forecast to remain flat over the coming three months, with the outlook in London significantly worse than other parts of the UK – 22 per cent more respondents in London expect sales to fall over the next three months.
Despite the drop in demand from buyers, though, prices have continued to rise, although at a more moderate pace – apart from central London, which saw a modest decline and the North, which saw prices remain flat.
“Uncertainty is a word that features heavily in the feedback we are receiving from members responding to the survey and is contributing to the flatter trend in the latest data,” says Simon Rubinsohn, RICS Chief Economist.
“More ominous is the expectation that both prices and rents will head materially higher over medium term despite existing affordability concerns with the supply pipeline continuing to fall short of household growth notwithstanding the various levers the government is pulling to try and drive development.”
61 per cent more chartered surveyors expect prices to go up across England and Wales.
Stamp duty hike to spark housing market slowdown
14th March 2016
The upcoming stamp duty hike in the UK could spark a housing market slowdown, chartered surveyors have warned.
Buyers have been rushing to beat the stamp duty deadline at the start of 2016, but the Royal Institution of Chartered Surveyors forecasts that the short-term burst of activity could give way to a cooldown in demand.
The latest RICS survey found that while 74 per cent of respondents expected there to be a rush on buy-to-let purchases ahead of the 3 per cent increase in stamp duty for second home purchases, only 17 per cent (net balance) expect to see an increase in sales over the coming three months.
In addition, while house price inflation expectations peaked following the Chancellor’s Autumn Statement, with prices driven by speculation regarding an increase in investor demand, this trend is predicted to soften from March, as investor interest dampens. Only 21 per cent of respondents expect prices to increase over the coming months.
The survey showed that house prices continued to creep up throughout February. Across the UK, East Anglia continues to show the sharpest price increases, with 91 per cent of respondents reporting that prices had risen over the past month.
London and the North East, on the other hand, saw very modest gains.
Indeed, prices expectations in prime parts of the capital are turning negative, with values set to stabilise after sharp periods of inflation. Outer London boroughs, however, remain “firmly positive”.
“Anecdotal evidence has suggested that a combination of exogenous factors is contributing to the overall picture in prime London, with tax changes, foreign market slow-downs and uncertainty over Brexit all being mooted as potential reasons behind the changes in demand,” comments Simon Rubinsohn, RICS Chief Economist.
“The challenges facing the top end of the capital’s property market are clearly visible in our latest results. However, it is evident that the broader London market remains firm in the face of the on-going shortage of stock and pent up demand. Although agreed sales in February were strong, the dip in new buyer enquiries suggests that it might be reasonable to assume a slower market in the spring as a result of this change.”
“It is inevitable that over the coming months, April’s Stamp Duty changes will take a little of the heat out of the investor market,” he adds, but notes that the depreciation of the previously strong pound could encourage overseas investors back to the market.
Buyers rush to beat stamp duty deadline
9th February 2016
The UK housing market has started 2016 on a positive note as buyers rush to beat the rise in stamp duty this April.
From 1st April, purchases of second homes in the UK, whether for residential or investment purposes, will be charged an additional 3 per cent in stamp duty. As a result, the number of housing valuations carried out in January climbed 52 per cent compared to January 2015, according to Connells Survey & Valuation.
The figure represents the fastest annual uptick in total valuation activity since July 2015, when volumes rose by 57 per cent year-on-year. On a monthly basis, valuation activity across all housing sectors grew by 13 per cent between December 2015 and January 2016.
“With the April 1st Stamp Duty surcharge looming, many investors and second home buyers have begun the New Year eager to move up the ladder before this kicks in,” says John Bagshaw, corporate services director of the valuation firm.
Indeed, the buy-to-let and remortgaging sectors were the key drivers behind the strong growth of overall housing activity in January.
The number of valuations for buy-to-let purposes grew by 51 per cent annually, while remortgaging soared 97 per cent.
“Buy-to-let investors are also continuing to flex their muscles,” adds Bagshaw.
“While many are hurrying to expand their portfolios before the Stamp Duty changes kick in in April, others are new-comers to the sector, who simply see buy-to-let as a good investment opportunity – regardless of the tax hikes and hurdles the Treasury throws at it. Nevertheless, we can expect the buy-to-let sector to reach a height of activity over the coming months.”Google+