2017 turned out to be a politically turbulent year, but a somewhat lacklustre one for the property market, once again demonstrating the resilience of the British when it comes to home ownership.
Indeed, the latest report from LSL revealed that average house prices have seen a return to growth after several months of slowdown and the Land Registry reports that house prices are, on average, up 4.5% on last year when the figure was 6.3%.
These figures are skewed by significant regional and timeline variations and should be viewed with caution. For example, the Land Registry reports a fall of 0.6% fall last month alone, despite the annual rise. The more recent LSL report this as 0.9% - its lowest since April 2012.
Much of the downward pressure on prices has come from the influence of a poorly performing London and the South East, although this is now easing. Even within these areas the figures fluctuate widely (eg Westminster down 18%, Redbridge up 8.6%), although every region except Greater London has seen some sort of price rise. Nevertheless, Rightmove is predicting an average asking price increase of just 1% next year – about a third of the rate of inflation!
RICS members concur in their latest Residential Market Survey that the short-term outlook for prices is broadly flat, with contributors unconvinced that the market is going to gain any momentum in the coming months due to the continued shortage of new instructions, alongside general economic uncertainty. Indeed, the number of new-to-market properties has now been declining for 22 months in succession.
Contrary to the usual laws of supply and demand, low stock levels in a country with a severe housing shortage do not always support house price increases. Most would-be buyers are not in the market, as their own property is not yet on the market. It’s a vicious circle that is broken when people put their faith in their agent to deliver results. Only then can wonderful things can happen!