Market Contracts In September With Both Buyers And Sellers Stalling
The usual ‘autumn bounce’ in home buying and selling has stalled in September as the looming October Brexit deadline deters buyers and sellers from making a move in the housing market.
The number of sales agreed, according to Rightmove’s September House Prove Index, has plummeted from a 6.1% increase in August activity when compared with 2018’s sales, to a significant fall on 5.5% in September’s index as buyers put their home move on hold.
Similarly, sellers have also been startled and spooked by Brexit uncertainty as new properties coming to the market is down 7.8% compared with the same period a year earlier.
With current buyers enjoying increased powers, the price of property in September has fallen by 0.2%, the first fall in September since 2010, signifying a clear anomaly caused by the political upheaval.
Miles Shipside, Rightmove Director and housing market analyst comments:
“Many have got used to living in the jaws of uncertainty since the referendum over three years ago, and have been getting on with their lives and housing moves. However, as we approach yet another Brexit deadline, there are signs that the increasing gnashing of teeth is causing some to hesitate.
“The autumn bounce normally kicks off at the same time as kids go back to school, but this year it’s a late starter at best, and if uncertainty persists then the autumn term could be missed altogether and its activities be delayed until the new year. Those who are planning to buy or trade up and can keep their nerve whilst others hesitate may find that they are in a stronger negotiating position to get a favourable deal.
“In August, we reported a pre-Brexit buying spree with the number of sales agreed up by over 6% compared to the prior year, as buyers and sellers decided to get deals secured well before the next Brexit deadline. A month later, as the deadline gets closer and tensions heighten, there has been a big swing the other way with sales agreed numbers now over 5% below those of a year ago. Buying activity is still at nearly 95% of what it was a year ago, but sellers in all regions are seeing fewer sales go through, so should be more willing to negotiate with prospective buyers if they want or need to get a deal done.
“All regions are down on their numbers for both sales agreed and properties coming to market. Some regions are just marginally behind the previous year, but they are all seeing less activity in these two key metrics, showing that hesitation is now more widespread rather than being localised to just some parts. However, some of that will be due to difficulty in finding the right property to buy, as activity still remains brisk in some locations, evidenced by continuing upwards pricing pressure in some parts of Great Britain. Uncertainty is clearly not just about the political situation, with finding the right property to buy being a bigger worry for many.
“There’s obviously some year-on-year bounce occurring in prices in the North West, and also in the North East, Yorkshire & the Humber and Wales, which all have new sellers asking at least 3% more than at this time last year. Buyer affordability and investor activity create and maintain market momentum, but these factors are lacking in parts of the south.”
Will buyers and sellers return to the market once a Brexit outcome has been achieved? Or, will caution and trepidation persist beyond October?