The property market is struggling to move beyond a snail’s pace with the time it takes between instruction and completion now at their slowest rate in five-years.
According to recent data from Homes.co.uk, the average (median) time a property is spending on the market is now 89 days. In May 2018, this figure was only 78 days.
The last time properties were languishing unsold for so long in the month of May was in 2014. As Brexit uncertainty continues to envelop the property market, both buyers and sellers are remaining reticent about committing to a sale.
Worryingly, the latest data suggests sellers entering the market is also falling; nationally, new instructions have reduced by 9% when compared with May 2018.
Doug Shephard, Director of Home.co.uk, said:
“Uncertainty is a highly corrosive factor for the economy. Decisions are postponed indefinitely, projects put on hold and normally bold actors become cautious in the midst of the unknown.
“The Brexit mess may not hamper the purchase of a pair of jeans, but the housing market is severely affected because the stakes are so high.
“Key factors such as cost, importance of timing and the irreversible commitment involved in a home purchase make the current economic environment almost unbearable for the average buyer or seller.
“Uncertainty in the market moves the ‘invisible hand’, a term coined by Adam Smith to describe the unobservable market force that helps the supply and demand of goods in a free market to reach equilibrium.
“That equilibrium is vital for price recovery but is currently being undermined by a growing crisis of confidence in the housing market, especially in Greater London.
“While evidence of falling demand is widespread across the UK, in London both supply and demand are collapsing, and this is causing an acute distortion of the market.
“Price fluctuations during such episodes are to be taken with a pinch of salt. Low volumes lead to extreme volatility in several key market price indicators.
“Take the Halifax and Rightmove indices, which are showing wild variations from month to month and adding to confusion in the marketplace.”
Has the conveyancing sector been affected by a reducing housing stock in recent months? Do you think the market will improve once a Brexit decision has been made?
