The housing market is approaching something of a standstill as the summer holiday season begins according to a downbeat report from Rightmove.
The average price of newly-marketed property in July is almost static, up by just 0.1 per cent - the equivalent of £312 - although this is a better performance than the June figure reported by Rightmove, which showed a 0.4 per cent fall.
The portal, in its latest monthly index, says the shortage of stock means that “prospective buyers in many parts of the country are seeing a lot of sold boards on properties they would like to buy themselves.”
It says the strength of buyer demand and lack of new build and existing property coming to market have resulted in over 45 per cent of agents’ property stock being sold subject to contract.
This is the highest proportion ever recorded by Rightmove since we started tracking it seven years ago.
“Prices are in the summer doldrums. Sellers coming to market at this time of year have to price more keenly as the traditionally bubblier spring selling season is over and prospective buyers are distracted by their own summer holiday plans” says
Miles Shipside, Rightmove director and its housing market analyst.
But he insists that a year on from the EU referendum the fundamentals remain strong. “Low unemployment, low interest rates, strong demand and historic undersupply of homes are mitigating any wobbles in confidence and as a result nearly half the properties on the market, over 45 per cent, have sold signs slapped across them” he says.
Compared to the period around the referendum a year ago, more sellers have come to market and more buyers are buying.
The number of sales agreed is up by 4.6 per cent in June 2017 compared to June 2016, and the number of sellers coming to market is also up on the same period a year ago, with a 7.6 per cent increase in fresh choice.
The recovery in buyer activity has also meant that sales agreed year-to-date in 2017 are now virtually on a par with the same period in 2016 which was boosted by the rush to beat the April 2016 stamp duty deadline, running at just 0.4 per cent down.
But Shipside reminds us that “it has to be kept in mind that the comparison is against a subdued new listing period in 2016 around the time of the referendum.”
He continues: “We can see now that price rises are muted despite high housing demand, indicating we have left the stage of the cycle where price rises exceed the rate of inflation. High demand will continue to underpin prices, but we are seeing stretched affordability limiting the pace of rises, especially in the south of the country.”