Figures from the National Association of Estate Agents (NAEA) show that there was a sharp increase in housing market activity during June. While there is a suspicion buyers and sellers are looking to tie up loose ends before their summer holidays it was a welcome improvement. Could this be the start of a recovery in the UK housing market or was it simply a sharp rebound from a difficult few months?
Quiet May to lively June
The basic figures make very good reading with the average number of sales per estate agent branch increasing to 11 in June from 10 in May. This is also supported by registration numbers with 384 homebuyers registered per branch in June compared to just 350 in May. It is also worth pointing out that there were just 330 potential buyers per branch in May 2016. When you also bear in mind first-time buyer transactions increased by 30% between May and June perhaps there is hope for the short to medium term?
The proof will most certainly be in the pudding and we await July’s figures with great anticipation if not a little trepidation.
For many years now estate agents have been complaining about a lack of supply to the UK housing market. When you bear in mind the added buoyancy amongst buyers you might have been forgiven for hoping that sellers would follow suit with a more optimistic outlook for the UK. However, supply issues in the UK housing market looks set to continue for some time to come.
Between May and June this year the number of residential properties available per branch fell from 40 down to 37. The data from NAEA members also shows that those struggling to obtain the asking price fell between May and June as did those lucky enough to get above their initial asking price. On the surface it is difficult to see why there is a lack of supply in the UK housing market but if house prices are “soft” this probably sums up the reluctance of sellers to take below the market price.
Looking forward to a quiet summer
As we head towards peak summertime the NAEA fully expects the UK housing market to weaken as buyers and sellers focus their attentions elsewhere. Whether this lack of activity will soften prices yet further remains to be seen but there are still many uncertainties on the horizon. We only need to look at Brexit negotiations which have started on a wrong footing for the UK. Economic indicators are giving very mixed signals and the political scene is more confusing today than it was immediately after the last general election.
It is sometimes easy to forget that UK house price have performed phenomenally over the last few decades with many people banking significant profits. The fact it is taking a breather in light of the above issues is no surprise but the critical point will come when markets return to higher activity levels at which point we will see whether buyers or sellers have the upper hand. At the moment you would assume that buyers would be in a stronger position but potential sellers are reluctant to “give away” their properties at prices they deem to be too low. Who will blink first?