First-time Buyers
New buyer demand slips for third month-in-a-row
Greater caution has hit the housing market with new-buyer enquiries tumbling for the third month-in-a-row with London seeing its fifth monthly decline for the first time in three years.
Research from RICS also suggests the Scottish Referendum ‘No’ result reversed an incredible +49% rise in interested buyers in August to +6% of surveyors reporting a drop in interest in September as Scotland stayed in the Union.
Prices are also more stable as the number of new properties hitting the market have stabilised and properties are beginning to get offers below asking price.
The survey suggested political rhetoric around Mansion Tax is also hitting home, as price expectations for larger three or four bedroom properties, have fallen since the start of the year to 2.2%.
In contrast, demand has continued to grow in the lettings market across the majority of the UK.
However, despite market conditions, surveyor expectations for price growth over the coming three months remain positive with only surveyors in London expecting to see values decrease and prices across the rest of the UK still expected to rise by on average 2.1% over the year.
Simon Rubinsohn, RICS chief economist, said: “Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London. This is a healthy development. Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “August, of course, tends to be quieter than other months and as we head towards the end of the year, lenders will be doing their very best to entice new customers in an effort to meet their year-end targets. It might be giveaway iPads or rock-bottom fixed rates but there are plenty of deals on offer.”
Harris said it is ‘curious’ that remortgaging remains low given the historically cheap rates and threat of an interest rate rise.
“Some borrowers may be concerned about their ability to remortgage given the new affordability criteria and may find themselves stuck on their lender’s standard variable rate when rates do start to rise,” he added.
