The market is now over-supplied with homes to sell while at the same time demand is dipping and there are widespread cuts to asking prices.
That’s the gloomy analysis of Home, an online property platform that produces a monthly analysis of the market based on around 500,000 pieces of house price data.
Its statistics, just released, certainly make depressing reading..
Average asking prices in England and Wales fell by 0.3 per cent this month, dragged down by hamstrung regions in the South and East of England “where supply has overwhelmed demand” according to the website.
There’s a 14 per cent annual increase in homes on sale, and the number of properties on the market in October was the highest for that month for any time since 2011. The largest surges in supply were observed in the South West (up a huge 24 per cent year on year) and the West Midlands (up 21 per cent.)
The number of properties that had their asking prices reduced last month (80,291 in mainland UK) was slightly lower than the total for September (83,780) but remains very high, the site warns.
Typical Time on Market continues to rise in London (up 12 per cent annually), the South East (up 14 per cent) and the East of England (up 16 per cent). Meanwhile across all of England and Wales the average Time on Market has risen to 94 days, five days longer than in November 2017.
Home says that “region by region, prices have hit new euphoric highs and then begun the inevitable correction. In addition, many landlords continue to shed unprofitable rental properties in the wake of the twin assaults of taxation and regulation, and this new trend is exacerbating the supply situation, especially in the South and East.”
It says that in October the East of England’s prices went into the red, with supply in that region growing further this month.
“The South West seems likely to be the next region to follow suit, with annualised growth having fallen to just 0.7 per cent and supply surging strongly. Following that, the next region to succumb to this demise is most likely to be the East Midlands, wherein Time on Market figures are now beginning to increase” says the site.
“So the sun sets once again on the UK property market” says Home director Doug Shepherd.
“Supply is soaring, especially where pricing is weakest. Time on Market is rising. The national year-on-year price growth figure looks set to go into the red and we’ve only had one tiny rise in interest rates.
“Some good news for buyers, perhaps, for those who have kept their powder dry. Plenty of choice (and it’s growing rapidly), but how many such ‘cash buyers’ are waiting in the wings to snap up a bargain? I would suspect not many.
“So for most homeowners, moving house will be more difficult in the current climate. Securing a mortgage approval is trickier. Securing a buyer takes longer and getting them to commit while prices are still sliding is a devil of a job. Hence the fall- through rate soars under such market conditions and agents and vendors alike begin to tear their hair out.”