The combination of World Cup fever, Brexit and an un-British heatwave has made it difficult to work out what is happening in the property market – and what will happen later this autumn.
The latest monthly report from Nationwide found annual house price growth slowed to 2 per cent in June, from 2.4 per cent in May.
Nationwide predicts that over 2018 as a whole, prices will rise by around 1 per cent. The slow rate of growth may be disappointing, but the fact that prices are still inching upwards is encouraging, underlying the strength of the UK housing market. It is also great news for first-time buyers for whom price stability is a godsend.
At the Royal Institute of Chartered Surveyors (RICS), the most positive indicator this summer has been the fact that members have reported an increase in new instructions for the first time in two years.
It is a buyer’s market, on balance, which should encourage those looking to bag properties at prices lower than they might have expected to pay at the start of the year. This should in turn help kick-start the market in the longer term. Better a market which new buyers feel they can enter with confidence, knowing there are bargains out there, than one which is running out of control.
On the lettings side, The RICS has reported rental prices are flat-lining, although its members expect them to increase slightly by the end of the year, partly because of the lack of supply.
Two factors that could impact on both the sales and rentals markets are the greater clarity about Brexit that should come in the autumn and the predicted (though not inevitable) rise in interest rates by the Bank of England in August.
Until then, with many buyers and sellers alike sitting on their hands, there is unlikely to be any dramatic move in the market. “With Brexit on the horizon, households are feeling the pinch and, with interest rate uncertainty lingering, a lot of prospective buyers are sitting tight,” says Jonathan Samuels, CEO of Octane Capital.
But buyers’ understandable caution may not be a bad thing. “As we have said many times, the central London housing market has an underlying robustness that always withstands temporary lulls in activity,” explains Martin Bikhit, MD of Kay & Co. “Buyers who shop around, at a time when mortgage rates are still historically low, will be well placed to buy properties of quality at a reasonable price.”
That in itself gives cause for optimism.
• Martin Bikhit, Managing Director of Kay & Co has more than 20 years’ experience in the prime and super-prime property sectors.
• Contact Kay & Co estate agents for details of properties for sale, to rent or block management in Marylebone, Bayswater, King’s Cross, Paddington, Notting Hill, Mayfair, Hyde Park, Fitzrovia, Regents Park, Paddington and The West End (020 7262 2030; Kay & Co).