Housing market ‘very mixed picture’

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Published: Thursday 12th February 2015 by The News Editor

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The housing markets in Scotland and Northern Ireland strengthened in January as those in England and Wales cooled off, surveyors have reported.

The Royal Institution of Chartered Surveyors (Rics) said the housing market was showing a “very mixed picture” across the UK.

Central London, which last year drove much of the house price growth seen across the country, recorded the most negative price growth seen in the capital for six years in January, with an overall balance of 49% of surveyors in the capital reporting prices falling.

Across the country, Scotland saw the strongest buyer interest, with several surveyors suggesting that the new land and buildings transaction tax, which is set to replace stamp duty in Scotland, will prompt more first-time buyers to get onto the property ladder.

Meanwhile, Northern Ireland recorded the strongest price growth , with a balance of 47% of surveyors there reporting prices rising.

Scotland followed closely behind with a net balance of 38% of surveyors reporting prices increasing rather than decreasing.

In Wales, 18% of surveyors reported seeing prices rise rather than fall.

Rics said that anectodal evidence from surveyors suggested that a “multitude” of factors were having different impacts across the UK, with political uncertainty being a factor generally.

It said the recent stamp duty reforms announced in the Autumn Statement by the UK Government were already providing a boost in areas such as South West England and Scotland.

Meanwhile, there were wide variations on the supply side of the market, with the supply of homes for sale remaining tight in North West and South East England, while in the South West of England more properties had come to market in recent months.

Rics said that across England and Wales, there were generally signs of a cooling market as well as price growth having “all but levelled off”.

A balance of 2% of surveyors there expected prices to increase rather than decrease over the next three months, marking the slowest growth since May 2013.

In London, a balance of 24% of surveyors expected prices to fall further in the capital over the coming three months.

Despite the more mixed mood, in the longer-term, surveyors remained fairly optimistic, with an overall balance of 48% still expecting the number of house sales to increase rather than decrease in the next 12 months.

Rics suggested that strong competition between lenders to offer low-rate mortgage deals would help to boost activity.

During the first half of last year, the strength of the housing market recovery in London took many commentators by surprise.

But by the middle of last year there were signs of a more cautious mood.

The housing market appeared to enter a calmer phase as the recovery rippled outwards, as some regions where the market recovery had been slower to take hold started to see house prices edging upwards once more.

Some experts have previously suggested that the referendum on independence in Scotland disrupted some housing market activity there last year as people awaited the outcome.

Meanwhile, figures from the Office for National Statistics have shown that house prices in Northern Ireland, which fell particularly sharply following the economic downturn, still have some way to climb to reach the levels they were at before the financial crisis took hold.

Simon Rubinsohn, chief economist at Rics, said: “There remain a number of challenges to the market, such as ongoing affordability constraints, lack of stock and an air of caution in the run-up to the general election.”

Published: Thursday 12th February 2015 by The News Editor

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