UK Property Market Continues To Calm Down
Tue 23 Sep 2014
The seasonally adjusted estimate of the number of non-residential property transactions decreased by 0.1% in August 2014 compared to July, as the market enters a period of calm following heated activity.
While the latest HMRC figures show property transactions edged down, though, the estimated number of sales is still 2.3% higher than last year, a trend that highlights the improvements made by the market.
Sales decreased in January and February before recording a large increase in March 2014. This was followed by more decreases until May 2014, after which transactions rose again - until August's dip.
Peter Rollings, CEO of Marsh & Parsons, says that trading conditions are "beginning to look reassuringly more familiar" again. Indeed, steep house price growth during the first three months has softened to a steadier and more sustainable upward slant, as demand is finally being matched by an encouraging amount of new housing stock on the market.
"The volume of house sales dipped in the month to August 2014," continues Rollings. "But if we look at the figures through a longer-term lens, there has still been a healthy step forward compared to the same point last year. The market may have wound down for summer as it recovered from the adjustment of tighter lending regulation comind into force, but there's still plently of gas left in the tank. We expect sales to move up a gear in the autumn, as calmer competition for available homes boosts the confidence of home buyers and pedals the wheels of activity."
Bidding wars put pressure on buyers.
August 2014 saw the number of sold properties rise by over 1.9% in the UK. However, seasonal trends would tend to show less activity throughout the month of August. So far this September there has also been a rise in asking prices by 0.9%.
Henry & James, a prime central London agent, has experienced both. On one occasion buyers went to a bidding war over a property that had been on the market for 10 weeks. It resulted in the final bid being in excess of the asking price.
This may be great news for vendors, however it puts a lot of pressure on the buyers themselves. According to an Aviva survey, the current property market is showing that more and more customers are spending less time viewing properties they are interested in than they did a year ago.
Author - Dan Johnson