Rain and snow have been blamed by some surveyors for a lack of market bounce-back in February, prompting one to say, 'roll on the spring'.
What’s the latest?
The stalemate in the housing market continued in February with both buyers and sellers staying away.
Enquiries from new buyers fell for the 11th month in a row, while the average number of properties estate agents had on their books hit a new record low.
Unsurprisingly, given the lack of activity, there was also a drop in the number of sales agreed, according to the Royal Institution of Chartered Surveyors (RICS).
The situation looks unlikely to improve in the near future, with agents reporting a fall in the number of valuations they were being asked to carry out compared with a year earlier.
Why is this happening?
RICS attributed the current stalemate in the housing market to a combination of stretched affordability and a lack of choice.
Strong house price rises have left property values significantly higher than average earnings in many areas of the country, making it difficult for people to buy their first home or trade up the ladder.
At the same time, the current shortage of homes for sale, means those who can go ahead with a purchase are being deterred by a lack of choice.
The group said the average estate agent had just 42 homes on their books, the lowest level on record.
Those taking part in the latest market survey also blamed uncertainty over Brexit, and recent inclement weather, with a Grantham, Lincolnshire, surveyor saying: "February was set for great things and fizzled out in a flurry of snow."
"The market has been very much linked to the weather this year. The dull, overcast rainy days bring very little activity. Roll on the spring," added a Bury St Edmunds surveyor.
Who does it affect?
While the headline picture was one of subdued activity, there continued to be significant regional variation.
New buyer enquiries continued to increase in Scotland, Northern Ireland and Yorkshire and Humberside, in contrast to London, the south east and East Midlands, where they fell.
There was also a mixed picture in terms of house price growth, with Wales, the north west, Northern Ireland and the East Midlands posting strong gains, while falls were reported in London, East Anglia, the south east and the north.
Sounds interesting. What’s the background?
Despite the current lacklustre market, estate agents are more upbeat about the longer term, predicting house prices will rise by 15% over the coming five years.
The research comes after Prime Minister Theresa May launched a consultation on a range of measures to encourage more homes to be built.
Proposals include enabling properties to be built on brownfield sites in green belts, as well as ensuring at least 10% of properties on new developments are affordable homes.
When asked what the main factors driving demand for new build properties were, estate agents said the shortage of existing stock was a major influence, as was the Government’s Help to Buy scheme, which offers assistance to people purchasing a brand new property.
Top 3 takeaways
- The stalemate in the housing market continued in February
- Enquiries from new buyers fell for the 11th month in a row, while the average number of properties on estate agents’ books hit a new record low
- Property values remained unchanged in February for the ninth consecutive month