According to the most recent house price and mortgage lending reports from March and April 2015, the first quarter of the year has been a slow one. However experts are expecting the market to pick up now the new government has been appointed.
The RICS Residential Market Survey for April suggests transaction levels and overall buyer demand are both remaining steady post-election. This is said to be attributed to continued uncertainties about what will happen within the residential property market.
In addition, respondents to the survey have noted home movers are seemingly withholding putting their properties on the market, with a lack of new listings being witnessed when compared to the same period in 2014.
The survey has also reported that house prices are continuing to increase, while housing stock remains a concern. This is backed up by the Office for National Statistics House Price Index for March 2015, where the data shows the pace of house price inflation has surged increase across the majority of the UK.
Since the same period last year, March has seen nearly an 8% increase in the price paid by first time buyers, according to ONS statistics. The Council of Mortgage Lenders (CML) lending figures for March 2015 report that the amount borrowed by first time buyers reached £3.4 billion, which is up by more than 20% month-on-month.
That said, the level of first time buyer mortgages is currently at 23,000 – down 5% since 2014, according to the CML data. This lack of transactions is also upheld by the respondents of the RICS survey, as there has been a 21% increase in those reporting a fall in sales.
These latest figures demonstrate conveyancers are experiencing uncertain times, with the housing market hanging in the balance. However property professionals are remaining optimistic with 16% expecting the market to pick up within the next 3 months – and even more so within the coming year, according to the RICS survey.
Buy to Let continues to be the market with the greatest level of growth, with a 21% increase in mortgage transactions when compared to March 2014 within the CML lending figures. The report has also stated the lending figure now stands at £2.7 billion – a 35% increase annually.
These figures however are counteracted by the data from RICS because although demand for rental properties has increased, letting activity has reportedly remained level for the 7th consecutive quarter. It has also been noted that there are substantial differences across UK regions within the Buy to Let market, with a somewhat north south divide in supply levels.
Andy Knee, Chief Executive of LMS, comments:
“With a rise in lending to all borrower segments in March, we’re beginning to see signs of life in the housing market. Growth in remortgage lending on a monthly and annual basis indicates that savvy buyers are no longer tied to their existing deals and are keen to harness the low Bank Base Rate by shopping around for the competitive options flooding the market. Quarterly remortgaging still remains down from last year, which comes as no surprise given the slow start to this year due to a lax mood in the remortgage market.
“Although the most uplifting news is the rise in month-on-month lending to first-time buyers, the segment still needs adequate support – despite 20% growth over February, first quarter lending has still not matched the first quarter of 2014. The election result was the best possible outcome for the housing market, ensuring less disruption and greater security, as well as potential continued support for first-time buyers, for example, through an extension of Help to Buy.
“The new government is aware of the property supply crisis and while housing remains top priority for Brandon Lewis, the agenda should also be about offering housing supply in the right places. The latest house price figures from the ONS show that prices in London, for example, have risen by 11.2% compared to the national average of 9.6%, an indication that more people want to live in the capital and that most buyers, first time buyers in particular, are being out-priced in the city and the East. When tackling supply it should be crucial that this is affordable and in the right place for those who need it.”
What are your thoughts on the coming months within the residential property market? Please share your opinions and predictions in the comments section below.