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Property prices down in the last month but substantial year on year growth

23 June 2014

  A surge in supply and fall in the number of new buyers in the London property market is putting the brakes on the city’s residential real estate growth.   The latest monthly housing market monitor from national estate agent firm Haart shows that London has seen supply increase by 9.5% in May compared with April and by 7.2% year on year.   But the number of new buyers coming to the London market fell by 6.1% in May and is down 2.6% year on year.   Nationally new property instructions are up strongly on the month by 6.3% and the number of first time buyers had increased by 11.2% annually.   Overall the average UK is now priced at £200,707, unchanged from the previous month and up 9.2% since May 2013. While in London prices are down 0.8% month on month but up 22.9% year on year.   ‘At last stock is coming to the market with new homes for sale in London surging 9.5% on month in May and 7.5% annually. Sellers are now keen to capitalise on recent house price rises and lock into continuing low interest rate mortgages,’ said Paul Smith, chief executive officer of haart.   ‘This is a significant factor in freeing up the 18 month log jam of supply. Buyers and sellers across the board will benefit and encourage fluidity in all price brackets. The UK as a whole has also seen a 6.3% monthly surge in new property instructions,’ he pointed out.   ‘Our analysis shows the effect on property prices to be relatively steady with no discernible change in UK property prices on the month. We are now starting to see the market self correct rather than rapidly deflate. Annual price growth remains strong, but let’s not forget that regional property prices are still below their peak 2007 levels,’ he explained.   ‘The appetite to buy remains high with the volume of new buyer registrations across the UK up 3.8% annually with first time buyer registrations up 11.2%. If there is more rumour and conjecture over interest rates and a fall-out from MMR demand levels could be dampened,’ he added.   The index data also shows that the average first time buyer property price is now £155,574 up slightly by 1% on the month and up 4.2% annually. The annual increase in first time buyer numbers continues to drive up the average price.   The number of new buyers coming to the market is up 3.8% annually but has dipped 3.2% on the month. The reason for these slightly suppressed figures could be uncertainty over next year’s general election and when interest rates will be rising, the report says.   The number of new properties for sale has surged 6.3% on the month and is up marginally by 0.1% on last year. This is a sign that confidence to sell is creeping back to the market which will loosen up the log jam at all levels of the property ladder.   The number of property sales is up 12.3% annually and 3.7% on the month, a demonstration of the health of the property market as the annual uplift in new property instructions and new buyer registrations is translating into successful property sales.   The number of new first time buyers is up 11.2% annually, but down 3.8% on the month, mirroring the dip in new buyer registrations. First time buyers now make up 45.6% of all mortgages which is down slightly on April 2014, however this is still up on last year.   The average mortgage that first time buyers are able to take out is up to £124,646, an increase of 9.1% annually indicating that lenders are more confident when they do actually lend.     Source - PropertyWire      

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