Cheap mortgages, a resilient economy, Brexit fatigue and an endless round of extensions have enabled the housing market to weather the storm created by the referendum far better than most commentators had predicted. And, as we reported last month, there have even been times when the market has performed above the levels of previous years. Now, as Boris Johnson intends, we are taking things more seriously as the October 31st deadline looms.
As a consequence, it has generated a temporary hiatus in home sales as we all wait to see what happens next. Traditionally, September marks the start of the busy autumn period. Asking prices normally rise as we head towards Christmas but this year, Rightmove reports they fell by 0.2%. Sales volumes were down too – by 5.5% – and that, for once, was on a national rather than a regional basis. The number of properties for sale has also fallen – down by 7.8% when compared to the same month last year.
Miles Shipside, Rightmove director and housing market analyst says:
‘Many have got used to living in the jaws of uncertainty since the referendum three years ago and have been getting on with their lives and house moves. However, as we approach yet another Brexit deadline, there are signs that the increasing gnashing of teeth is causing some to hesitate.’
In London, those conditions are even more evident. The monthly fall in asking prices were 2.2% in September and there was a 20% drop in the amount of stock available for sale. It’s certainly not all bad news because, at the same time, the average time taken to make a sale has been reduced to a relatively swift 69 days, suggesting that the lower prices are now attracting more buyers.
Whatever September’s figures might be though, they are the result of a short term phenomenon so it’s impossible to read too much into them. And, for example, although transaction volumes were down, they were still at 95% of last year’s levels – i.e. there are still plenty of sales going on, they are just reduced, and only slightly.
In the longer term, October should provide us with a clearer picture and, as we all know, the property market prefers certainty, whatever that certainty might be. Then all those people who have been sitting on their hands are likely to become active again, creating a substantial bounce effect.
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