UK property experts believe that this summer could be relatively flat as supply and demand issues dominate the marketplace. What is interesting is to see that experts are talking of a flat summer as if this is a bitter blow to the UK property market when in reality summer does tend to be relatively quiet. People take holidays, the children are off school and moving home is the last thing on many people’s mind. So, what should we expect in the summer of 2017?
New enquiries flat
The Royal Institute of Chartered Surveyors has highlighted the fact that agreed sales and new instructions fell in April from a relatively low March. This would seem to indicate we are entering a flat period for the UK property market although a lack of supply is causing some issues. When you also throw the snap election, Brexit and recent tax changes into the mix, is it any surprise that some investors are taking a back seat at the moment?
It is interesting to see that many estate agents are reporting falling numbers of properties on their books. Indeed the next three months could see a record low with just 3% of surveyors suggesting there will be an increase in supply. There is more encouragement for 2018 but 2017 may well be a quiet year for the UK property market.
Property price growth
Amidst all the doom and gloom it is interesting to see that property prices are still ticking up across the UK although at varying levels. Those polled by the Royal Institute of Chartered Surveyors believe that house price inflation will slow in the latter part of 2017 and could challenge the softest figures which occurred back in July 2016. The main reason why house prices are continuing to rise is simply because of a lack of supply even if demand is down on more recent levels. More competition for fewer properties pushes prices higher – it is as simple as that.
At this moment in time it is difficult to predict when supply levels will return to “normal” because we have the snap election, Brexit and an uncertain future for the UK economy in the short to medium term. One issue which does tend to get overlooked is record low interest rates in the UK and the fact that these are reflected in record low finance costs. Even though the Bank of England today suggested that UK base rates could rise sooner than many predicted, it is unlikely we will see a significant rise in the short to medium term.
Doom and gloom merchants out in great numbers
To suggest that a quiet summer for the UK property market is of any real concern is a little bit wide of the mark to be honest. Summer time does tend to be a relatively quiet time for the UK property market for a variety of reasons and this year will be no different. It will be interesting to see how UK property reacts to the ongoing Brexit negotiations and indeed whether a drop in short-term supply turns around in the medium term. The fact is that UK property prices continue to rise simply because of a lack of supply to cover even subdued demand.
If this is the worst that the UK property market will see in light of Brexit and other ongoing issues, is the UK really in that bad a place?