Has UK housing market run out of steam? Momentum slows, data shows

Housing market activity slowed sharply in December as the latest coronavirus restrictions had a negative impact on the sector.

The latest residential market survey from RICS shows that while activity in the housing market has continued to increase, momentum has dropped significantly, and this trend looks set to continue.

“Viewings across our businesses are down around 70% compared to December,” said one commentator on EYE yesterday. “Valuation diaries died off significantly.”

Another agent concurred: “We’re open, but very quiet, we have new stock on the market but little or no takers.”

The research from RICS saw a net balance of +15% increase in new buyer enquiries during December, which is down from +26% in November.

The report, based on the responses of surveyors across the UK who were surveyed in December, also shows that agreed sales slowed, with a net balance of +18% compared to +24% in November.

Property prices have continued to increase, according to a net balance of +65% of respondents to the poll.

London was identified as the “only region where house price inflation appears somewhat muted” with the latest net balance for the capital at +7%, down from +13% in November.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, commented: “The housing market was still running hot in December, as prospective buyers mobilised before the threshold for stamp duty returns to £125,000 from £500,000 at the end of March.

“Nonetheless, timelier Google Trends data suggest that the market is now starting to cool: the number of people visiting one of the three main property websites has merely been in line with seasonal norms so far this year, having exceeded its 2016-19 average by about 20% through the second half of last year.

“The cooling off in demand likely will be amplified as vaccines are rolled out, making people happier with their pre-Covid housing choices once again, and by a rise in unemployment.”

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5 Comments

  1. mattfaizey

    Hardly surprising.

    There’s an army of EA staff and conveyancers putting up warning notices, sounding sirens and shouting:

    oh yea, oh yea. All who think of moving soon. Know that there be no room for you’.

    Seriously, WTF do you all expect when conveyancers and agents are doing nothing but creating uncertainty and draining confidence out of the market?

    Oh, and in case you hadn’t heard, all those thinking of looking for a house have in the last two weeks watched infections and deaths rise.

    It’s hardly surprising interest has waned.

    Couple all this with constant headlines spreading doom from the very individuals who should be promoting positivity and the irony is strong.

     

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  2. MisterP76

    It’s definitely cooled in my area with considerably less enquiries for survey work received since Christmas.

    It was always going to happen with last year’s  Stamp Duty holiday led rush seen as this years income come early and not a bonus.

    Time to pull our belts in it would seem.

    Frustrating but completely predictable.

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  3. James White

    The first two to three weeks in any New Year are slow and it is too soon to tell.  Add to that snow in many parts of the country and pseudo lockdown 3 that most are ignoring and you have a recipe for a slower start.

    We all hope that it is not the start of another grim period, but let’s have a little patience.

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    1. surrey1

      Concur. It’s less than two weeks in and there’s a lockdown (of sorts). If we were brutally honest about how much we usually do in terms of unproceedable viewings, valuations wanting some extension advice etc, strip that out it’s going to be quiet.

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  4. SISDAD

    It was my comment quoted above regarding a drop in business levels; it’s been taken out of context. I was making the point that the public were finally taking more notice of lockdown measures and more are staying at home, hence the fall in business. Once the pandemic eases and lockdown lifted, I’m confident of a boost to the market, albeit not to the levels seen during 2020.

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