Newly-marketed property prices at virtual standstill, up by 0.1% (+£312) as we enter quieter holiday season
Fundamentals remain good mid-year with robust demand, low interest rates and low unemployment:
-Sales agreed numbers remain strong year-to-date in 2017, almost identical to 2016
-Prospective buyers in many parts of the country are seeing the highest proportion of properties marked as sold than at any time in the last seven years
-Even with 7.6% more sellers coming to market this month compared to this time last year, buyer choice is restricted as supply fails to keep pace with strong sales and buyer demand
Stretched buyer affordability acting as a price brake with national average at a modest +2.8%, with buyers very price sensitive and some properties hitting their price ceiling
The onset of the summer holiday season generally has a dampening effect on both prices and activity, and this month sees the price of newly-marketed property at a virtual standstill, up by just 0.1% (+£312). To put it into context, this is a stronger price performance than the previous month’s fall of 0.4%, and is also well ahead of the same month a year ago which suffered a fall of 0.9% after the Brexit referendum.
As we reach the half-way point of 2017 the fundamentals of the housing market appear to remain robust a year after the shock referendum result. Interest rates and unemployment remain low, and demand for housing remains high, exacerbated by the shortage of available unsold property for sale. This means prospective buyers in many parts of the country are seeing a lot of sold boards on properties they would like to buy themselves. Indeed, the strength of buyer demand and lack of new build and existing property coming to market have resulted in over 45% of agents’ property stock being sold subject to contract. This is the highest proportion ever recorded by Rightmove since we started tracking it seven years ago.
Miles Shipside, Rightmove director and housing market analyst comments: “Prices are in the summer doldrums. Sellers coming to market at this time of year have to price more keenly as the traditionally bubblier spring selling season is over and prospective buyers are distracted by their own summer holiday plans. A year on from the shock referendum result and subsequent dent in activity levels, the fundamentals remain strong. Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45%, have sold signs slapped across them.”
Compared to the period around the referendum a year ago, more sellers have come to market and more buyers are buying. The number of sales agreed is up by 4.6% in June 2017 compared to June 2016, and the number of sellers coming to market is also up on the same period a year ago, with a 7.6% increase in fresh choice. The recovery in buyer activity has also meant that sales agreed year-to-date in 2017 are now virtually on a par with the same period in 2016 which was boosted by the rush to beat the April 2016 stamp duty deadline, running at just 0.4% down.