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House sales to continue declining in 2019 as Brexit uncertainty and lack of supply hinder activity

House sales are to continue stagnating next year amid Brexit uncertainty and lack of supply, according to the Royal Institution of Chartered Surveyors (RICS).

In its forecast for the year, the trade body said the UK housing market is unlikely to see much change in 2019, with sales volumes to weaken by around five per cent and house price growth to reach a standstill.

The report said 2019 would be the third straight year of decline, with annual completed transactions staying significantly below the 1.7m high in 2006.

Tarrant Parsons, RICS economist, said Brexit uncertainty had caused “greater hesitancy”.

That said, the current political environment is far from the only obstacle hindering activity with a shortage of stock continuing to present buyers with limited choice, while stretched affordability is pricing many people out” he said.

“For the year ahead, this mixture of headwinds is unlikely to dissipate, meaning sales volumes may edge a little lower.

“On the back of this, house price growth at a UK level seems set to lose further momentum, although the lack of supply and a still solid labour market backdrop will likely prevent negative trends.”

Source: City A.M.

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House sales fall in ‘flat’ market as all regions in UK see a decline in transactions

Transactions fell in July, HMRC has revealed.

All regions saw a decline on a monthly basis, the smallest of which was in England at 4.2%, while Scotland and Wales were down 18.4% and 20.2% respectively.

The taxman’s latest property transactions data shows 105,940 UK sales last month. Despite the monthly decline, the figure was up 0.3% annually.

This was helped by a 15.2% annual boost in Northern Ireland to 2,340, while England experienced a barely-there 0.95% increase to 90,780.

However, annual figures in Scotland and Wales were down 1% and 15.9% respectively on an annual basis.

All regions saw a decline on a monthly basis, the smallest of which was in England at 4.2%, while Scotland and Wales were down 18.4% and 20.2% respectively.

Northern Ireland had a 14.2% monthly decline in transactions for July.

This led to a 6.5% monthly reduction in sales across the UK on a non-adjusted basis.

The seasonally adjusted estimate showed transactions decreased by 0.8% between June and July and was down 3.2% annually to 99,270.

Commenting on the figures, Kevin Roberts, director at the Legal & General Mortgage Club, said: “Despite increased innovation in the property industry and assistance from Government schemes such as Help to Buy and Shared Ownership, property transactions remain stagnant.

“A fundamental imbalance between supply and demand continues to stifle movement within the market, and until this issue is properly addressed, homeowners will find it difficult to downsize or upsize into better suited properties. The lack of availability of appropriate housing at all stages of home ownership is restricting movement in the market and creating bottlenecks.

“It’s therefore crucial that the industry continues to take whatever steps it can to ease this block and make the UK housing market accessible for all.”

Guy Bradshaw, director of central London sales and lettings at UK Sotheby’s International Realty, said: “The number of property transactions is always a much clearer picture of the market’s health than house prices as this shows what is genuinely happening on the ground.

“Undeniably recent economic and political uncertainty is being reflected in these lower figures but what is important is that these lower figures are less extreme than what we were seeing earlier in the year.

“Rather than a market in decline we are seeing simply a flat market.

“We must also remember that the average transaction time is three months so these deals would have taken place in April when vendors were just recovering from an unseasonably cold spring.

“We don’t expect to see the market to change dramatically in the next six months, but we have seen more listings, viewings and offers in the past two months.

“Whether there will be a peak in transactions later in the year will be determined by whether agents sensibly price properties.”

Source: Property Industry Eye

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Sales volumes decline across the whole of the UK

Sales volumes fell across all UK regions, with the biggest declines in London and the midlands, the latest Land Registry data shows.

The Land Registry’s latest House Price Index reveals that volumes in London were down 21% annually in September to 6,494 sales, bigger than the 15.8% recorded a month before.

Transactions in the east midlands declined further, falling 17% year-on-year in September to 6,099 compared with a 15% annual drop recorded in August.

Sales in the east of England dropped 17% to 7,701.

Figures for transactions up to August – the latest month for which sales volumes are available – show double digit declines everywhere except the north-west and east of England.

Activity in London fell the most annually in August, when 7,186 sales were recorded. This is down 15.8% on the same period last year.

Across the UK, the number of property transactions was down 12.9% annually during September 2017 to 83,374.

The biggest drop was in England, where volumes were down 14.8% to 64,812 compared with a year before.

House price growth also slowed during November, the index shows, dropping to 5.4% from 5.1% in October.

Prices were also down on a monthly basis, slipping 0.1% to give an average of £226,071 for the month.

On a regional basis, London and the north-east are now tied as the slowest growing regions with rates of 2.4% annually. There is a big difference in prices, though, with averages in the capital at £481,731 on average and buyers in the north-east paying £127,737.

Commenting on the figures, Jonathan Hopper, managing director of Garrington Property Finders, said: “London’s once all-conquering property market can console itself with one meagre statistic – it is no longer outright last, just joint last.

“Despite the gradual slowdown in the national rate of price growth, demand remains solid in many areas – albeit with one fundamental caveat.

“Even committed buyers are deeply price sensitive, and despite today’s fall in consumer price inflation, many would-be home owners are seeing their wages shrink in real terms, causing them to watch every penny and walk away from any property they feel to be overpriced.

“The market continues to flow broadly as it should, and the stand-off between limited supply and cautious demand should nudge up prices further throughout 2018. But it will be steady progress at best.”

Meanwhile, private rental prices in Great Britain rose at their lowest rate since the Government began recording them six years ago.

The latest figures from the Office of National Statistics showed that prices were up 1.2% in the 12 months to December 2017.

The rate of growth in London was particularly sluggish, with prices growing by 0.4% in the 12 months to December 2017.

In England, private rental prices slowed slightly to 1.3%, down from 1.4% in November 2017.

Wales saw growth of 1.7% in December, while Scotland saw rental prices increase by 0.4% in the 12 months to December 2017.

In the English regions, the largest annual rental price increase was in the east midlands (2.6%), down from 2.7% in November 2017.

This was followed by the east of England (2.2%), up from 2.1% in November 2017, the south-west (2.1%), unchanged from November 2017 and the south-east (2%), down from 2.3% in November 2017.

The lowest annual rental price increases were in the north-east (0.1%), up from 0% in November 2017, and London (0.4%), down from 0.6% in November 2017.

Source: Property Industry Eye

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UK home sales up over 6% on same time a year ago

UK property transactions fell between October and November but were up on an annual basis during November, HMRC says.

The taxman’s latest data on UK property transactions shows there were 108,710 non-seasonally adjusted sales above £40,000 in November.

This was down just 0.36% on October but up 6.1% on the same period last year.

On a seasonally adjusted basis, HMRC said transactions were up 0.6% monthly and 7.1% annually to 104,200 during November.

Transactions slipped in Northern Ireland, falling 6.8% between October and November to 2,320, while England saw a 0.31% dip over the month to 92,070.

Transactions were flat in Scotland but up 1.3% in Wales over the month to 5,150.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “We have now breached the million-mark in terms of the total number of residential transaction figures so far in 2017, whether you take the unadjusted figure or the adjusted figure.

“Taking into consideration political and economic headwinds this year, one would suggest that these figures evidence a market that has largely held steady due to the fact that many consumers still see property as a reliable long-term investment.

“Although we’re ending 2017 with a slightly higher interest rate than when we started 12 months ago, all in all one would suggest that we’re going into 2018 on a solid footing: demand for homes in many regions is still high, mortgages are still priced very competitively and we now have the Chancellor’s Stamp Duty exemption for first-time buyers which may see renewed activity at the entry level of the market over the coming months.

“Of course, we won’t know the ‘big number’ for total transactions this year until towards the end of January, as there is always a month’s lag in the data.

“However, for many in the industry, despite reports of a significant cooling of activity in London and the south-east over the last few months, the numbers would suggest that, for now, the UK property market as a whole has remained resilient in the face of challenging circumstances.”

Source: Property Industry Eye