Should We Be More Worried About The Overall Housing Market?
The housing market has, on the whole, bee booming over the last year and a quarter. We have seen high buyer demand and strong prices here at Robert Oulsnam and Company for the last 15 months, before a slight decline in sales and price stagnation during July. And yet in some sections of the market things are still rosy – Victorian terraces are still selling very well, for example.
The hint of a slump in July can be interpreted in rather dire terms. There is a narrative that stresses the slowing of house price rises, the cooling down of the London market and the negative impact of the new lending regulations introduced by the Government in the form of the Mortgage Market Review (MMR).
According to a report issued by Housetrack in July 2014 the July slump is set to be much more than simply a traditional seasonal decline during the summer holiday period. Housetrack report that house prices nationally increased by only 0.1 per cent during July, compared with 0.3 per cent in June, and 0.5 per cent in May. Moreover the number of new applicants to purchase properties fell by 0.9 per cent and sales also fell by 0.3 per cent during July. In London the market has reportedly cooled to such an extent that 11 per cent of all areas are now seeing price falls.
Housetrack ascribe this slowdown in demand to various factors – the tougher lending rules of the MMR causing administrative backlogs and preventing otherwise creditworthy buyers from being able to raise capital; fears over interest rate rises and the rhetoric of the Bank of England; and worries over an emergent housing bubble.
Such a negative slant on the market is one way of looking at things. But the market may just be a little more robust than this view would suppose – as noted above we are still seeing strong sales in some areas, and the issue of the traditional seasonal slowing cannot be underestimated in the figures.
Moreover, there are other statistics that can used to show the resilience of the market. A recent report by Sequence shows that the UK, excluding London, witnessed a 21 per cent increase in buyer registrations, with prices remaining buoyant – increasing by 1 per cent on June during July, and increasing by 8 per cent annually to reach £175,728. As for buyer demand there are now a reported 6 buyers for every property on the market and 11 for every property in London. The number of viewings and offers made annually has also increased by 7 per cent and 17 per cent. As for the influence of the MMR, mortgage applications increased by 13 per cent over the course of June as the initial impact of the lending rules subsided.
When the July trends are considered in a greater context things seem less negative – the market remains strong and it is still a good time to buy and sell property in the UK.