While it is dangerous to take one month’s figures in isolation there are signs that the UK property market is bucking the traditional winter trend. Historically the number of properties listed and sold in November falls fairly sharply as the industry effectively closes down for the winter period, opening up again in the New Year. There are a number of potential reasons for this unseasonal trend which we will cover below.
Bargain hunters
We can look at a whole host of potential reasons for the unseasonal strength in the UK property market but perhaps it is just bargain hunters? If you know that there will be a lull in November then perhaps there are investors look to take advantage towards the end of the month?
However, if we take a step back and look at this situation from a distance, this does not necessarily add up. If you expected a fall in activity during November then surely you would look to invest towards the end of December when to all intents and purposes demand will have dried up almost completely?
Economic environment
There is no doubt it has been an extremely volatile 12 months for the UK with confusion and concern sweeping through investment markets. The Brexit vote obviously caught many investors by surprise and in all honesty it has taken the investment markets some time to come to terms with this. The forecast sell-off has been nowhere near the levels predicted by the Remain campaign but there was a moment when the economy and investment markets appeared to freeze.
So, perhaps this better-than-expected demand across November is due to pent up demand which had been building up across the summer. It is also interesting to look across the waters to Europe and the array of referendums and political debates ongoing. Is there a chance that the UK might remain within the European Union with more control over immigration? How will the Italian constitutional referendum pan out? Will the German government continue to move towards the UK’s way of thinking with regards to a future working relationship and access to the single market?
Ongoing shortage of stock
Each year the shortage of housing stock in the UK becomes ever more evident both for those looking to acquire property and those looking for rental accommodation. It may well be that this acute shortage of stock continues to worsen and the historic highs and lows in property listings and property sales start to level out. Despite promises by the current government, and previous administrations, investment in new housing stock is still well short of what is required. Could this be feeding the unseasonal demand for property in November?
Conclusion
When you consider that the number of new property listings fell by an average of 12.2% during November 2015 compared to just 4.7% in November 2016, this is a marked difference. The number of properties sold in November 2016 has fallen by 1.8% compared to 14.7% last year. So, while it is dangerous to take one month’s figures in isolation there does seem to be unseasonal demand for UK property at this moment in time.