Region’s house prices and sales activity losing momentum in ‘subdued’ market

Record low stock numbers, political uncertainty and the aftermath of tax changes are obstacles hindering Yorkshire and the Humber’s housing market, a new report reveals.

According to the latest RICS UK Residential Market Survey, price growth and sales activity subdued in July.

During the period, only 16% of chartered surveyors in the region saw house prices rise in Yorkshire and the Humber, and the number of homes on agents’ books fell to a new all-time low, leading to sales activity falling in the region last month.

Agents in the region reported an average of 46 homes on their books, which they say was “particularly disappointing” for would-be buyers, given the summer period is usually the busiest time for the housing sales market.

Comparatively, three years ago in July 2014 agents reported an average of 77 homes on their books, which was considered a ‘healthy’ amount.

Despite the lack of homes for sale on the market, demand from potential buyers increased moderately last month, with 12% of respondents reporting a rise in buyer enquires, compared to just 4% in June.

Looking ahead, near term price expectations are cautious with only 17% of contributors expecting to see house prices rise in the region over the coming three months. However, over the next 12 months, respondents are more optimistic with 44% predicting house prices will increase over the coming year.

Furthermore, a bleak picture arose when looking at sales predictions, with respondents not anticipating an increase in sales activity over the next three months, and only 17% of respondents expect to see a rise in sales over the next 12 months.

The main element holding back the market continues to be a sustained deterioration in the flow of fresh listings, with new instructions dwindling for the seventeenth consecutive month during July, and subsequently limiting choice for potential home buyers.

Simon Rubinsohn, RICS chief economist, said: “Sales activity in Yorkshire and Humber’s housing market has been slipping in the recent months and the most worrying aspect of the latest survey is the suggestion that this could continue for some time to come.  One reason for this is the recent series of tax changes but this is only part of the story. Lack of new build in the wake of the financial crisis is a more fundamental factor weighing on the market. And there are some very real consequences for the economy from all of this including the impact on the ability of people to be mobile when looking for work.

“The flatter trend in price growth is arguably a silver lining but there is no real indication that the housing market will become materially more affordable anytime soon. Hence the need for the government to press ahead with the Build to Rent initiative as well as continuing to focus on other tenures alongside home ownership to try address this critical issue.”