UK’s Available Housing Stock Continues To Decline
A recent housing index, carried out by Agency Express, has echoed UK wide trends and sentiments that sellers remain nervous to enter the housing market in the midst of severe political uncertainty.
Whilst sales increased to 16.9% from 15.5% in February 2018 nationally, new listings entering the market fell from 2.7% in February 2018 to -0.7% in the present.
Although there are huge variances between the countries within Great Britain, the trend remains the same. Sales are at least stable, but housing stock is falling in comparison to the figures obtained in recent years.
New listings entering the market have been significantly reduced in Scotland, tumbling by four times the 10% in February 2018 to just 2.5% last month. Although this is a huge increase on the UK’s average, it represents one of the largest stock reductions, year-on-year, in the UK.
Similarly, new stock entering the Welsh housing market has plummeted from 7.6% to 0.4% within a year.
The report indicates that London has been affected more than most with new listings entering the market falling to -8.8%. Over a three-month period, this stretches to -23.1% which represents the largest decline in available housing stock on record for the month of February.
These figures are in line with the most recent figures from NAEA Propertymark’s January Housing Report which found that the supply of housing fell by 14% in January from 42 available homes per branch in December to 36 in January.
Stephen Watson, Managing Director of Agency Express said: “We typically see figures plateau in February but the latest data from the Property Activity Index has shown a decline in supply compared to the same month in 2018. However, overall figures remain robust and year on year activity continues to increase for us.”
Mark Hayward, chief executive of NAEA Propertymark, commented: “January is usually the time where we’d expect to see house hunters flood the market following the festive lull; however, this didn’t happen last month. It’s normal that during a period of uncertainty, buyers put their plans on hold, and until there’s further clarity on what Brexit will mean for the market, we expect the level of house buyers to remain stagnant.
“However, it’s clear that people still want to sell their homes, and there’s properties available for those looking to move. While FTBs are taking advantage of this situation, those hoping to secure a property may well find the market is leaning in their favour, as the number of sales agreed per branch return to the level seen at the start of 2018. Although sellers are usually keen to hold off until they secure the ‘right price’, when the market is slow, they are typically more willing to negotiate. After all, when demand falls, and supply remains the same, it’s a buyers’ market.”
Despite the robust sales figures since the New Year, it is clear that sellers remain reluctant to complete a home move until the political and social landscape becomes a lot clearer.
What effect will this reducing housing stock have on conveyancers?