Uncertainty continues to stifle Yorkshire and Humber's housing market
House price inflation in Yorkshire and Humberside dropped further in June, according to the latest RICS (Royal Institution of Chartered Surveyors) UK Residential Market Survey. At the same time, there is little encouragement for sales activity, with agreed sales declining alongside new buyer enquiries and new instructions (homes coming on to the market).
In June, 24% of surveyors in Yorkshire and Humber saw a rise - rather than fall - in prices (down from 26% in May). But only 12% of surveyors in the region expect prices to rise further over the coming three months. However, the picture looking a year ahead is rosier for potential sellers, with over half of contributors (51%) in the region expecting prices to rise over the next 12 months.
Looking at demand; only 3% of respondents reported a rise in new buyer enquiries during the month of June, and this flat trend is being reflected in medium term sales expectations, with only 4% of agents in Yorkshire and Humberside anticipating sales will increase over the coming three months. This is partly due to the ongoing problem of a lack of housing stock, which surveyors report is at an all-time low in the region.
During the month of June for example, agents reported an average of 46 properties for sale on their books. During the same time period last year (June 2016) agents had an average of 60 homes on their books, whilst two years ago - during the same time period (June 2015) - agents held an average of 78 properties on their books.
Moving on to transaction levels; respondents saw a decline in newly agreed sales in June, which makes for the fifth consecutive month that sales levels have fallen. This lack of activity reflects both the lack of stock coming on to the market and a more cautious stance from buyers over recent months.
This warier outlook of the housing market can be seen again in the responses to questions which were asked to gather further insight regarding the generally flat trend in activity being seen. Nearly half of contributors (44%) identified political uncertainty as the biggest factor explaining the current state of the market, whilst 27% highlighted Brexit as the most important factor influencing the picture.
James Brown MRICS of Norman F Brown in Richmond said: “The June market was slow following the election result, but did rally in the last week and we shall see whether this continues. Brexit negotiations over next few years will continue to unsettle the market.”
Simon Rubinsohn, RICS Chief Economist, commented: “RICS indicators, particularly regarding the price trend are pointing towards an increasingly divergent picture. High end prime properties may be seeing prices slipping back but, for good or ill, prices are continuing to move higher in many other segments of the market. Indeed, the disaggregated data suggests that this will continue to be case over the coming months.
“Perhaps not surprisingly in the current environment, the term ‘uncertainty’ is featuring more heavily in the feedback we are receiving from professionals working in the sector. This seems to be exerting itself on transaction levels, which are flatlining, and may continue to do so for a while particularly given ongoing challenge presented by the low level of stock on the market.”