Since the Brexit vote at the end of June this year the UK housing market is beginning to recover. To begin with there was an immediate loss in confidence in the residential market but there has been a positive movement in the latest August figures from the UK Residential Market Survey.
We can now see the house prices starting to increase again with steady momentum after the previous 4 months of falls. We are still seeing a reduction in enquiries from buyers and sales instructions, however this decrease is at a far smaller pace than in previous months.
Prices are increasing
The survey taken in August shows that there was a significant drop in activity and prices achieved just after the European Union vote in the UK. However in August is can be seen that there was now an increase in confidence, with both price and sales now expected to rise over the next three months. This rise is also predicted over the next 12 months looking forward as the market begins to stabilise itself.
12% more respondents outlined an increase in prices in August, compared with 5% in July 2016. Compare this with the past 18 months of surveys it is still the second weakest result seen. London however showed that house prices remained falling, as they have done so for the past 6 months, contrasting with everywhere else in the UK.
This means that looking forward most places in the UK, except London, should expect a stronger priced housing market for the next year.
After the referendum residential sales dropped sharpley, but by the time August arrived the levels began to stabilise, the agreed sales indicator rose to zero from -32%. However, in some areas of the country sales do still seem to be falling. Looking ahead, sales expectations have noticabley improved with readings at their strongest since February. The sales projections for the next 12 months are also encouraging, climbing out of the negative territory across the UK.
One of the key factors in supporting the rising house prices is the continued shortage of stock for sale in the UK. This doesn’t look to be changing as new instructions declined once more during August. This means that the stock available slipped for the third month in a row, which as a result is approaching the record low which was recorded in December 2015.
The demand by new buyers also decreased slightly across the UK, although the pace of this decline has eased significantly. The figures show that a net balance of -7% more chartered surveyors have reported a fall in demand in August, which is up from -25% in July.
So, as a whole there is a positive movement since the initial decline, with the housing market looking to stabilise itself in the next 12 months.