In an article this week published by the Guardian online, there has been a decrease in the growth of house prices in the UK’s housing market, marking it as the the slowest annual rate in 4 years this month, as according to data produced by Rightmove, buyers have become cautious about overpaying on properties. Figures produced by Rightmove show that annual price growth fell from 3.2% last month to 2.3% this month, the lowest since April 2013. Every month, average asking prices increased 2% to over £306,000, which has been recorded as the slowest rate of growth in the month of February for 8 years.
Miles Shipside, the director of Rightmove and housing market analyst, highlighted that there were a number of factors that were making buyers wary, such as inflation, which hit a 2-year high of 1.8% in January and is predicted to reach around 3% by early next year, which puts a burden on household finances. He went on to say: ”Property prices are still 2.3% higher than a year ago, but perhaps we’re approaching the territory where many buyers are unable or unwilling to pay what sellers are asking, given the negative combination of rises in the cost of living, tighter lending criteria and a dose of Brexit uncertainty.” Along with this, another factor that affected buyers was the boost in early 2016 of ”frenzied” buy-to-let investors purchasing properties before the stamp duty was increased in April, so this made this year look underwhelming in comparison.
The article also notes that estate agents have reported that buyer interest had remarkably declined if properties were priced more than 5% too high. Rightmove had examined over 100,000 newly listed homes and found that sellers were 40% more likely to sell with that agent if the property had the correct price when it first came on the market. Kevin Shaw, who is the national sales director at estate agency Leaders, commented: ”Setting an accurate price, based on local market conditions, is crucial for achieving both a quick sale and the best possible price…overpricing, particularly in a price-sensitive market, will result in the property sitting on the market until the price is dropped, losing the interest of buyers and ultimately achieving a lower price in the end.” Buyers have a tricky business of trying to find the best deal, but with a volatile market, there is very little wiggle room.
This sentiment is echoed by Brian Murphy, mentioned in the article as head of lending for the Mortgage Advice Bureau, who remarked that ”buyers are getting their ducks in a row financially before they start their property search” when it comes to applying for a mortgage and understanding how much they can spend.
Housing prices are still extremely high in Britain, with London still providing the highest figures throughout the whole country. In order to see how the rest of the year will fare, though, will be a waiting game.