Prospective Buyers Plummet Whilst Stock Levels Plateau
Demand for housing is now at a six-year low as house hunters delay searching for their new home in the current uncertain property and political climate.
According to February’s NAEA Propertymark Housing Report, the number of registered house hunters per average estate agent branch have fallen by 46% since the result of the referendum in 2016 when there were 463 registered house hunters per branch. Currently, this figure has dwindled to 252 potential buyers per branch which also represents a 15% reduction from the 297 recorded in January.
Overall, this is the lowest recorded figure since July 2013 when only 250 house hunters had registered an interest. Considering the property market should be entering a buoyant and busy Easter period, the comparison to a summer month, when house hunting is already statistically lower then the rest of the year, raises some red flags.
Whilst many buyers are deterred from looking for their new home, prospective sellers remain reticent about flooding the market with properties. In January, the average estate agency had 36 available properties, this figure dropped to 34 in February and whilst this is broadly in line with the 35 properties recorded per branch in February 2018, it could indicate that sellers are concerned about marketing their property amidst such uncertainty.
That being said, the reduced competition amongst buyers has meant first-time buyers have continued their market dominance and power, accounting for 30% of February’s transactions and a 4% increase from the 26% share of the market in January.
Mark Hayward, Chief Executive, NAEA Propertymark said: “With demand at a seven-year low, buyers are approaching the market with caution. As we move into spring, we would usually expect to see an increase in activity, but house hunters are evidently delaying their plans until the impact of Brexit is clearer. Over the last seven months however, we’ve seen periods where FTBs have taken advantage of reduced competition and driven their transactions forward, and this really picked up in February.
“The next few months will be very telling – will activity pick up once there’s further clarity on what Brexit means, or will it push the housing market into a deeper pool of uncertainty? Time will tell, but in the meantime both buyers and sellers should feel positive. There are still house hunters searching for properties and there are still new homes coming onto the market.”
What do these figures suggest about the current property market? Are reduced buyer numbers having an impact on the conveyancing sector?