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House prices: 'Market drought may be over'


11-24-2016

 

Property sales return to growth in October after Brexit-related slowdown over summer

 
'Market drought may be over'

A sales "drought" in the housing market may be over, according to a property expert, after a report showed the number of house purchases increased in in October.

On a seasonally-adjusted basis, the HMRC study says there was one per cent more houses bought last month than in September, says City AM.

There was a four per cent drop between August and September, when a fall in agreed sales in the immediate aftermath of the Brexit vote in June filtered through into completion figures.

From the perspective of house prices, it is possible to read these statistics both ways: as rising buyer demand putting upward pressure on valuations, or more sellers returning to the market and producing the opposite effect.

Most commentators, however, are convinced current trends are supporting prices, highlight surveys from the Royal Institution of Chartered Surveyors (Rics) that point to low numbers of new sales instructions and an increase in buyer demand,.

"These figures confirmů appetite for home ownership remains strong as we draw to the end of 2016," Stephen Smith, of Legal & General Housing Partnerships, said.

"However, it is important that we put these figures into perspective: the imbalance between supply and demand is continuing to overwhelm the market, pushing up prices and causing affordability to worsen."

Stephen Wasserman, the managing director of West One Loans, said: "Today's figures are a positive indication that the recent market drought experienced may be coming to an end."

However, Andy Sommerville, the director of Search Acumen, said that while it was "encouraging" to see property transactions return to growth, an eight per cent drop compared to October 2015 was "still rather bleak" and emphasised the general supply imbalance.

He continued: "All eyes are on Phillip Hammond to tackle the deep-rooted issues that long predate the EU referendum."

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