Slowly Does It
An Eye on the Spring Market
Transaction numbers are down on last year but there are reasons to be optimistic about housing market activity.
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The first half of 2015 has seen sales volumes falling. According to HMRC data the number of homes sold from January to May 2015 is down six per cent compared to 2014. That represents about 30,000 less homes sold than this time last year. It’s a tricky time to be putting a finger on sales numbers though. Our research of previous election years shows that while elections don’t seem to have much of an impact on prices they do on activity. With transactions tailing off in the six month period in the run up to an election then picking up after, once the election day uncertainty was done with.
Premature reports of a post-election surge aside what’s actually happening in the market? Across London and the South there’s been a noticeable increase in activity. Numbers of new buyers registering, viewings and offers made are all up compared to June last year. New buyer numbers have grown most in London, by nearly a third year on year. Although not in Prime Central London, but rather in the rest of the capital, the markets that might be considered more closely linked to domestic demand, instead of international wealth.
Activity numbers aren’t up quite so much in the South East and West, new buyer registrations are up five per cent versus 2014. This can in part be explained by the fact that this time last year the London market had started slowing, while markets in the South, particularly within the commuter belt, were seeing an influx of demand from Londoners leaving the capital.
The boost in buyer activity shouldn’t feed straight into price rises though, at the higher end of the market, stock levels are 13 per cent up on last year across the South of England and 17 per cent up in London. Affordability too, particularly in the capital remains a constraint. London is the only region in Hamptons International’s Ability to Buy Index that shows affordability conditions are worse now than in 2007, despite record low interest rates and recent wage growth. These early signs of increasing activity in the market tell us that the outlook for sales volumes, at least in London and the South is brightening.
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