Online estate agency Yopa is warning of price falls ahead in London and south east England - although price rises elsewhere will keep the national average stable.
Mike Scott, chief property analyst Yopa - which has substantial backing from Savills and LSL Property Services - was commenting on newly-released mortgage lending data for May which suggests that overall housing market activity is operating at much the same level as at the same time last year.
The total number of completed mortgages for house purchase was down by just 0.3 per cent from May 2018, with a slight increase of 0.5 per cent in the number of first time buyer mortgages and a decrease of 1.2 per cent in the number of home-mover mortgages.
Scott says: “There may well be some further regional price falls in the over-heated south and east of England, including London, but these will be offset by continued increases in the more affordable north and west of the country.”
But he adds: “A sustained downward trend in house prices is usually preceded by a slowdown in the number of homes sold, and so it seems unlikely that national average house prices will fall significantly this year.”
Former RICS residential chairman and north London estate agency owner Jeremy Leaf says the encouraging aspect of the new figures - released by mortgage trade body UK Finance - was the resilience of the first time buyer sector.
“First-time buyers are the lifeblood of the market as they buy at the bottom and trade up after a few years rather than investors who tend to buy at the bottom and tend to stay there. First-time buyers are also taking advantage of reduced competition from the buy to let market as landlords reduce activity following various recent tax and regulatory changes with several more on the way which will compromise profitability. They are also benefiting from almost record low mortgage rates and improving affordability” adds Leaf.
The UK Finance figures suggest that the volume of buy to let mortgages for new purchases by landlords was roughly unchanged from 2018, suggesting stability in the market after the raft of tax and regulation changes.
Tomer Aboody, director of property lender MT Finance, says: “We aren’t seeing a flood of buy to let investors selling up … Investors are absorbing the extra costs and refinancing, hoping that in the long term values will go up. This once again proves that higher stamp duty and extra taxes haven’t helped create more movement in the housing market, but have done the complete opposite and created stagnation instead.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, says it is welcome news that buy to let investors are sticking with the sector. “That said, we are also not seeing a flood of new landlords - rather, the experienced ones are adding to their portfolios where they see opportunities and remortgaging to keep costs down” he says.