Buyers, Sellers And Cash Purchasers Fall In October
Year on year, active buyers and housing stock decreased in October.
The number of registered house hunters per branch fell by 12% in October to 341 from 487 recorded in September, according to NAEA Propertymark’s Housing Report for October.
Whilst October’s activity has reduced since a more buoyant September, the current average buyer numbers suggests a level of resilience in the sector with the average house hunters per branch eclipsing the 294 recorded in 2018.
Housing supply continues to remain an issue with available housing per branch falling from 40 in September to 39 last month. This also represents a fall in supply from the 40 recorded in October 2018.
First-time buyers made up 27% of the transactions in October, a 4% increase when compared with the figures a year ago and 3% lower than September.
Brexit, election disruption and continued political uncertainty have contributed to a subdued autumn property market and are starting to impact buying trends.
According to a Hamptons International survey, buyers using cash to fund their property purchase fell by almost a third (28%) in the first half of 2019.
The figures for cash purchases are the lowest since 2009 when 36% of all purchases were cash based.
The Hamptons survey also suggested that investor behaviours were changing in the current climate as investors choose to utilise finance or migrate away from the buy to let sector altogether. In 2009, investors made up 34% of sales made using cash; however, this has fallen to under a quarter (24%) in 2019.
Mark Hayward, Chief Executive, NAEA Propertymark, said:
“Brexit is undoubtedly causing uncertainty in the housing market, which in turn affects sentiment and decision-making.
“On top of both a Brexit deadline and a looming general election, we’re also entering a quieter period seasonally, where we typically see the market slow down as people put their moving plans on hold until the New Year.
“Once the General Election has passed, and there’s clarity on how and when we’ll be leaving the EU, we hope there will be a degree of certainty which may trigger a flurry of activity in the New Year.”
Aneisha Beveridge, Head of Research at Hamptons International, said:
“The fall in cash purchases not only reflects tighter affordability, but also a decrease in activity amongst downsizers, the group of people most likely to have built up enough equity to purchase property with cash. It also reflects a drop off in the number of homes bought by investors, many of whom used cash to purchase.”
Will a more certain political situation and property market reverse these trends in the future?