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Demand for UK property fell by 16 per cent in February

The number of house hunters registered at estate agents slumped 16 per cent last month, according to a new report by NAEA Propertymark.

The number fell from 367 registered per branch in January to 309 in February, with a 28 per cent year-on-year drop. Agents had 425 house hunters registered per branch in the same month last year.

In line with demand, the number of properties available for sale per branch dipped from 36 in January to 35 in February. The rate of properties which sold at asking price was at the highest level since June 2016.

Sales to first-time buyers rose last month though, reaching their highest point since February 2015.

The February housing report said the chancellor’s first-time buyer stamp duty relief seemed to be having an impact, with sales to the group rising to 29 per cent last month – up from 27 per cent in January.

Last year, first-time buyer sales stood at 22 per cent, and in 2016 they were at 24 per cent. The average number of sales agreed per branch increased from seven in January to eight in February, which was the highest reported since last October.

Mark Hayward, chief executive, NAEA Propertymark said: “Since the chancellor cut stamp duty for first-time buyers, there have been a good level of sales to the group, but they haven’t rocketed.”

He said Propertymark members had noticed first-time buyers holding off on making purchases since the rule was introduced – typically outside of London – instead deciding to save for longer to maximise “the full stamp duty relief”.

Hayward added:

This may be one reason why sales are up but not as high as we might expect; the other reason is that the cost of buying is still very high, and first-time buyers are still finding it difficult to save for their deposit.

As the cost of living continues to rise – with consumer price inflation standing at 2.5 per cent in February – we still have a long way to go to make the dream of owning a home accessible to all, but this is definitely a step in the right direction.

Source: City A.M.

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Property prices increase but sales fall

Property prices continued to edge up in January but the number of sales agreed was down 5.5 per cent from a year ago, according to Rightmove.

Data from the online property portal showed the average price of properties coming to market increased 0.7 per cent, or £2,067, over the past month.

While sales numbers slipped in the final quarter of 2017, the site recorded a 9 per cent year-on-year increase in traffic in January, suggesting demand is starting to pick up.

Overall prices were up 1.1 per cent over the past year to a national average of £297,587.

In the north west they grew by 2.3 per cent in January to an average of £187,134, while the south west saw prices climb 1.6 per cent to an average of £294,046.

But four regions saw prices decline in the month, down 4.4 per cent to an average of £139,156 in Scotland and by 2.7 per cent to an average of £141,155 in the north east.

Rightmove, which saw four million visits to its site each day in January, said demand was robust but buyers were being “very choosy”.

The average number of days it takes to sell a property leapt to 67 in December, from just 54 in May last year.

Miles Shipside, director at Rightmove, said: “Setting tempting asking prices and quickly reducing them if there is little initial interest will be key to turning this promising level of buyer activity into actual sales.”

He said those selling to first-time buyers stood the greatest chances of a successful sale, with demand picking up after the government’s decision to scrap stamp duty for first-time buyers on properties worth up to £300,000.

Craig McKinlay, sales and marketing director at Kensington Mortgages, said it was positive to see house prices rising in line with wage inflation at a far more sustainable rate.

Jeremy Duncombe, director at Legal & General Mortgage Club, said: “We have a lot more to be positive about that in previous years: house prices are rising at a far more sustainable rate and, couple this with the exemption of stamp duty and government schemes, and it is no surprise first-time buyer levels are at an 11-year high.”

Source: FT Adviser

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Property prices and demand up

The average price of properties coming to market has risen by £2,067 (0.7%) this month on Rightmove, which tracks over 90% of the UK property market.

This is similar to the 0.6% rise at this time a year ago with virtually identical number of properties coming to market.

Demand evidenced by visits to Rightmove shows the market remains robust. The average number of visit so far in January is currently running over 9% higher than the same period a year ago, with an average of over four million visits each day.

Miles Shipside, Rightmove director and housing market analyst, said: “Considering some of the gales that buffeted the market in the latter part of 2017, these early readings for 2018 show that there is currently a good following wind of search activity.

“To keep this year’s initial buyer momentum with you rather than against, serious sellers should note that all regions are currently selling at a slower rate than a year ago, indicating choosier buyers.

However the number of sales agreed in the last quarter of 2017 is lower than a year ago in all regions, showing buyers are being choosy.

Shipside added: “The total number of sales agreed was 5.5% down in the last quarter of 2017 compared with the same period in 2016.

“Setting tempting asking prices and then quickly reducing them, if there is little initial interest, will be key to turning this promising level of buyer activity into actual sales, especially in the less active sectors and locations of the UK.”

The annual rate of price increase in newly-marketed property is 1.1%, but at more local level prices are running 4-6% up in some regions, with only London recording a year-on-year fall at -3.5%.

Stretched buyer affordability and an uncertain political outlook are counter-balanced to a degree by tight supply of suitable properties for sale and the recent near-abolition of stamp duty for first-time buyers.

There is no increase in choice for buyers, with average overall stock per estate agency branch holding steady at 42 properties, the same as a year ago.

The boost given to first-time buyers by the abolition of stamp duty for most of their purchases means that properties in that sector are facing higher demand. This consequently leads to more upwards price pressure, especially if supply is limited.

Talking about the impact of the stamp duty changes, Chris Chapman, divisional managing director of Estate Agency at Andrews, said: “Whilst it hasn’t, in our experience, resulted in a huge spike of first-time buyers entering the market, it has certainly created increased interest from purchasers who had previously felt unable to take the first step on to the property ladder.”

Source: Mortgage Introducer