Caution rather than Brexit blamed for stifling supply

Sellers are being cautious rather than panicking about Brexit, research claims.

Analysis of listings by property search website Home.co.uk found that new stock coming to market last month was down 4% year-on-year in February, while total supply levels are up 6.4% compared with February 2018.

Typical time on the market has increased by 12 days to 111 compared with the same period last year.

But Doug Shephard, director of Home.co.uk, said this data suggests the fallout from Brexit and recent buy-to-let clampdowns on landlords may have been overstated.

He said: “Overall, neither Brexit anxiety nor the landlord exodus has precipitated the level of over-supply required to cause a property crash.

“To see those kinds of levels we need only to look back to February 2008 when the sub-prime crisis hit lenders’ ability to lend and the typical standard variable rate mortgage had been ratcheted up to 7.25%.

“The flood of forced sales that piled up – in a market with serious mortgage liquidity problems – drove price growth from 4.4% in February 2008 down to -6.4% in February 2009.

“Today’s supply levels would need to more than double to match those darkest of days for the UK property market.

“In fact, the long view shows the market to be relatively stable in terms of supply, despite all the fearmongering over Brexit and fiscal and regulatory attacks on private landlords. It may be argued that this overall stability of supply is a key strength of the UK property market.”

He argued that the property market benefits from sales and prices in regions performing differently, adding: “This vital characteristic of the UK property market, known since at least the 1980s, appears to be hardwired into the way the sales market operates.

“Moreover, owing to the fact that the regions’ surges in supply and demand are asynchronous, they tend to be averaged out at the national level. Should the converse be the case, where all regions operate their boom bust cycles synchronously, the market would be alarmingly volatile and a truly ruinous affair for all concerned.”

The website’s data also showed that asking prices have fallen 0.3% annually this month to £305,221.

Separately, Rightmove has named Welsh town Barry as the most thriving housing market, where average prices have risen by 11% over the past 12 months to £191,050.

Average asking prices in Barry are more than 20% higher than they were five years ago when they were £156,878, says Rightmove.

The Vale of Glamorgan location is perhaps best known as the home town of the female lead in BBC comedy Gavin & Stacey.

One agency, Chris Davies Estate Agents, is currently listing a three-bedroom end-of-terrace property on Trinity Street – which is the road that Stacey lived on in the series – for £155,000.

Miles Shipside, property expert for Rightmove, said: “It’s great to see Barry named as the country’s hottest property market right now. It’s a great tourist spot thanks to the popularity of Gavin and Stacey, and not forgetting Barry also boasts some quite stunning coastal views.”

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One Comment

  1. James Wilson

    In London sellers are listing properties because they don’t want to know the truth.

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