The Housing Market – Subdued or Picking Up?
Recent figures from the Royal Institute of Chartered Surveyors (RICS) showed a mixed picture of the current housing market. During March it was found that house sales and enquiries had almost flat-lined, with the number of properties coming onto the market falling for the second month in succession. Consequently prices rose for the month, the fastest growth rate, says the RICS, for 5 months.
A net balance of 21 per cent more RICS members reported price rises over the course of March, up from a balance of 15 per cent during February. A balance of 15 per cent is also expecting prices to further rise over the next three months, up from 10 per cent in February. An overwhelming 70 per cent of RICS members are expecting price rises over the next 12 months, with Northern Ireland having the highest growth forecasts.
Nevertheless, despite these rises, the market in the rest of the UK was found to be a good deal more subdued – London, in particular, saw buyer enquiries and agreed sales drop for the eleventh month in succession. The number of RICS members reporting price falls reached a net balance of 13 per cent more seeing drops rather than rises.
The Nationwide reported similarly slow growth during March, with prices up by just 0.1 per cent on the month-by-month measure, and by 5.1 per cent on an annual basis, down from the February figure of 5.7 per cent and the seventh successive month of slowing price growth – back in June 2014 prices were rising at 11.8 per cent.
London and the South-East saw significant softening in demand and price growth over the first quarter of 2015. The number of mortgages approved by the Nationwide for home purchases is also down by 20 per cent relative to the same time last year.
Rightmove also reported fewer properties coming onto the market in March and during the first three months of this year, with the number of new sellers down 4 per cent on the same period in 2014. And those with properties on the market have upped the asking price by an average of 1.6 per cent on an annual basis. The overall rate of price rises by the Rightmove index dropped from 5.4 per cent to 4.6 per cent over March and April.
There is a possibility that both sellers and buyers are waiting for the election to pass before committing to purchasing or selling. Prices are being nudged upwards by the lack of homes coming available, but the lack of buyer interest is limiting those price rises.
This leaves us with the question of why Northern Ireland saw transactions and new buyers entering the market grow during March, with a net balance of 67 per cent more surveyors reporting price rises. It seems Northern Ireland is unique in the UK in that prices are still far below their peak – the likelihood is that prices will continue to see rises well above the UK average in the coming months.