Prices of homes in London either unchanged or falling for July
The residential property market in the UK is slowing with the latest house price reports showing falls or no change.
Prices rose 0.8% in the second quarter of the year compared with a 2.8% rise in the first three months, according to the figures from the government that are based on mortgage completions.
They were unchanged since May and are now 9.9% higher than in June 2009 with the average house costing £210,775 in June, the figures also show.
There is a mixed picture regionally with average prices rising 10.5% in England, 3.7% in Scotland and 13.5% in Wales but fell 7.7% in Northern Ireland.
The July UK Housing Market Survey from the Royal Institute of Chartered Surveyors shows that more surveyors reported a fall than a rise in house prices for the first time since July 2009 as demand from purchasers slipped back and the number of properties coming to the market continued to increase.
Some 8% more surveyors reported a fall rather than rise in house prices, the lowest reading in more than a year, when 16% more reported price falls. In contrast, last month saw 8% more surveyors reporting rising, not falling prices.
Regionally, the only areas which continued to see material price rises in the past month were London and the North West as demand for property, measured by the net balance of new buyer enquiries, fell for the second month in a row, from -6 to -10.
Difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential homebuyers, RICS says.
Looking forward, expectations for house price increases have also turned negative, says RICS with 28% more surveyors expecting prices to fall over the coming months, up from 6% in June. Despite this, sales expectations remain positive, with 8% more surveyors expecting sales to rise rather than fall, although this is down from the previous month.
‘The forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties,’ said RICS spokesperson, Ian Perry.
In contrast, the National Association of Estate Agents says that UK property market experienced one of its strongest months of the year so far in July. Its latest monthly market report found that demand for housing had increased, more sellers were putting property onto the market and the average agent made more sales than in June. The average agent in July had 292 registered house hunters, up from 279 in June.
Supply was also up, with agents reporting an average of 68 properties on their books, compared to 59 in June. The percentage of sales being made to first time buyers (FTBs) also increased from 21% to 26%, suggesting that the decision to raise the threshold of Stamp Duty Land Tax to £250,000 is translating into sales.
‘Demand and supply both increased in July, which is great news for the housing market. However we should not get carried away as what we are seeing is a slow, steady and patently fragile recovery,’ said Michael Jones, president of the NAEA.
‘One thing which is interesting is that consumer confidence in the market appears to be high, despite apparent uncertainty elsewhere about the future of the economy,’ he added. But he warned that lenders are still being too restrictive. ‘One message that estate agents throughout the country are giving us is that the market needs more lending.’