Posted on 1.7.16
A number of reports released recently are painting an uncertain picture in the current UK residential housing market. It seems that the difference between house prices in the North and South is becoming more disparate, whilst future trends are fair game as a result of the European Union referendum outcome.
According to the Nationwide Building Society, the North/South house price gap has increased to a record high, widening by £24,000 in just the last year. This now means that the gap is almost £169,000, which is even more than the average price of a house in the North on its own!
The index says that the average purchase price for a home in the ‘North’ – including NW, NE, the Midlands and Yorkshire – is £155,000. Whereas in the south of the country the average house price stands at £324,000 and in London is much greater still at £472,000.
Pre & Post Referendum Uncertainty Hitting the Market
With the EU Referendum result still raw and implications completely uncertain, predictions as to how and where the housing market moves to now in the next few months is the million dollar question. There’s no doubt however that it will be bumpy road with the housing market likely to be impacted heavily by conditions in the wider economy, especially the labour market and international investment, due to its close links. One thing markets don’t like is uncertainty, and with the all-important Article 50 still waiting to be triggered the uncertainty could last a while yet.
Even before the EU Referendum was held, the insecurity beforehand was enough to affect the figures. In the latest figures from the National Associate of Estate Agents a 6% decrease was seen in registered house hunters during the month of May in comparison to the previous month. This is the lowest level seen since November 2013. Furthermore, the May 2016 figure is 21% lower than May 2015 which really highlights the current mood in the residential property market.
The ‘Wait and See’ Landscape
With not much looking like it is going to be cleared up in the near future, there seems to be a ‘wait and see’ stance occupying the thoughts of many potential home buyers. The NAEA say that 30% of agents expect to see a decrease in demand following the Brexit vote with RICS expecting house prices to suffer a short term dip.
For some however, if this does happen, it may present an opportunity to buy a property whilst the prices are relatively cheap. The lower prices and uncertain times could provide fruitful ground via increased opportunity for the first time buyers who are in the financial position to take advantage. First time buyers may want to make hay whilst the sun is shining.
Although there has been an average 6% decrease in house hunters during May, the figure for first time buyer completed sales is actually up 1% to 27% of overall property purchases. With no children, the rest of their working life ahead, many first time buyers may be in the position to act fast whilst others assess their future.
Residential Conveyancing at Gorvins
Contact our Residential Property team today on 0343 507 5151 for a free quote for buying or selling a property. We aim to be as transparent as possible and all of our quotes include all costs up-front with nothing hidden to surprise you later on. You can also send in your enquiry via the online contact form and we will get back in touch with your quote.