RICS: Buyers hibernate as market freezes
Buyer demand fell for a seventh month in a row in November: not as fast as in October, but it’s still a significant drop. The number of agreed sales has fallen – again not as fast as October, but it’s still negative in every region of the UK.
House prices were down, particularly in the South East and South West, and are expected to keep falling in the coming 12 months. Rents keep rising, with tenant numbers up and landlords down again, and there’s no end in sight.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “Buyers are digging in for winter, and won’t be keen to move until the climate for property improves. Unfortunately, they may be in for quite a wait, and if they’re renting in the interim, there’s more bad news on the way.
“While most property data has an inbuilt 3-month lag, which makes it relatively ancient history, these figures highlight what’s happening right now – focusing on who is planning to buy, and the sales being agreed today. It demonstrates that the chill wind that blew into the market at the end of the summer has become a howling gale into the winter, and we can’t expect a thaw for some time.
“It appears that gradually rising interest rates, and horrendous price hikes, were taking a toll in August. We know the declining trends ramped up dramatically in September and October, as confidence plummeted, and now it appears they have settled in for the longer term as the threat of recession sees something closer to permafrost sweep in.
“There is still the hope that relatively high employment and low housing stock will prevent a deep and prolonged downturn. However, now confidence has taken a tumble, buyers aren’t going to be flooding back to the market in a hurry.
“For those who decide to sell and rent – or just keep renting – while they wait for more positive moves from the market – there’s more bad news. The continued flow of new tenants into the market and landlords out of it keeps pushing up rents, and there’s no end in sight for this particularly horrible trend either.”