Brexit weighing heavy on housing market, despite NW resilience
In a tumultuous week for UK Government – with many sectors feeling the ‘Brexit effect’ – the North West’s housing market bucked the trend last month.
The latest monthly RICS (Royal Institution of Chartered Surveyors) Residential UK Market Survey showed that buyer enquiries, sales and the volume of properties coming onto the sales market all rose during February.
Buyer demand in the North West improved during the month of February, and although a lack of stock has been a long-standing issue that has held the market back, agents in the region reported a rise in new properties coming on to the sales market for the second consecutive month.
However, average stock levels in the region remain low.
In February, the average time taken to sell a property in the North West was close to 16 weeks – from listing to completion – however, nationally it is worse at 19.4 weeks.
North West agents reported a rise in the volume of agreed sales last month, too, yet 32% expect sales to fall over the next three months.
Looking further ahead, sentiment for sales is more positive with 36% of respondents expecting sales volumes to rise over the coming 12 months.
House prices in the North West were flat last month, with more respondents not seeing a rise in prices during February.
But 31% of agents expect to see prices rise over the coming 12 months.
The only areas in the UK now displaying positive price growth is Scotland and Northern Ireland, with the rest of the UK regions returning flat readings.
Stephen Dodgson, of Rainfords Chartered Surveyors in Wirral, said: “Despite Brexit uncertainty, the market has been exceptionally buoyant for February.”
John Halman, of Gascoigne Halman Estate Agents, in Wilmslow, added: “We saw a swift upturn in sales activity during February, although the overall market remains subdued.”
In the lettings market, tenant demand and landlord instructions were flat, yet 25% of respondents expect rents to rise over the coming three months.
Richard Powell, of Ryder & Dutton in Oldham, added: “The Government’s policies have undoubtedly lowered the appetite of private landlords.”
Lastly, during the month of February, 75% of respondents in the North West cited Brexit uncertainty as the biggest challenge holding back the region’s housing market at present, with the impact being seen with both buyers and sellers.
Simon Rubinsohn, RICS chief economist, said: “Although activity in the housing market continues to be weighted down by the lack of available stock, changes in the tax regime affecting property, and affordability, feedback to the latest RICS survey makes it pretty clear that the ongoing uncertainty around how Brexit will play out is the critical factor influencing both buyers and sellers.
“And with little sign that the issue will be resolved anytime soon, it could prove to be a challenging Spring for the housing market and the wider economy.”
He added: “It is clear from professionals working in the market that this environment requires a greater degree of realism from those looking to move.
“A reluctance from some vendors to acknowledge the shift in the balance of power in the market will compound the difficulty in executing transactions.”
Hew Edgar, RICS head of policy (interim), said: “It is clear from recent months’ survey results that the wearisome state of British politics that has arisen from Brexit – particularly in the last six months – continues to take their toll on UK housing.
“Taking Brexit out the equation, there are clear issues that need to be tackled, such as supply, a disputable SDLT framework, and a faltering PRS system.
“All of which have been overshadowed and have therefore not received the much-needed Parliamentary discussion and debate.”
He said: “UK Parliamentarians must recognise that the prolonged uncertainty without effort to address separate key issues in the UK is damaging confidence in the housing sector, and we share the resounding sentiment of frustration from our professionals.”