Slow summer for property sales across Yorkshire
Sales activity in Yorkshire and Humber’s housing market remains subdued, with a slight lift in some areas during June, survey results reveal.
Fewer available rental properties are also likely to impact the property market further in the future, unless new regulations are introduced, say market experts.
The number of new properties coming on to the market, and agreed sales in Yorkshire and the Humber remained flat in June with only 6% and 7% of respondents, respectively, seeing an increase, the latest RICS UK Residential Market Survey shows.
This is the third successive month of a sluggish trend for sales activity in the region. Average stocks in Yorkshire and Humber remain close to historic lows at 39.
Following on from that, the New Buyer Enquiries series, which provides a gauge as to the appetite to acquire property (this series is well correlated with data on mortgage approvals), is showing little reason to expect any uplift.
The number of people looking to buy stayed mildly positive in June with respondents not reporting any notable growth in new buyer enquiries since Summer 2015.
The second half of this year is not expected to see a great change, with the time taken to complete a sale now taking over 20 weeks, the longest across all parts of the UK.
The survey has in the past highlighted a lack of available second-hand stock as a key impediment to the efficient functioning of the market, and the pipeline looks unlikely to improve with new appraisals of property by valuers down on the same period last year.
Looking ahead, Yorkshire and Humber’s chartered surveyors remain optimistic for sales activity in the coming three months, but at the twelve month point are more cautious, with a net balance of +9%.
A lack of activity on the sales side continues to impact prices. Despite an upward trend in prices across Yorkshire, chartered surveyors have reported a flatter picture, with respondents not anticipating much change in the coming three months either.
New instructions coming through to letting agents has dropped again (a net balance reading of -20%).
This is the eighth consecutive month in which the feedback points to a lower supply of rental properties coming to market. Changes around taxes on investment property has played a part in driving this trend. The Rent Expectations series is pointing to a cumulative average rise of around fifteen per cent over the course of the next five years.
Simon Rubinsohn, RICS Chief Economist, said: “It is hard to see what is going to provide much impetus for activity in the housing market in the near term. Meanwhile the on-going challenges around lifting the delivery pipeline, reflected in last week’s disappointing data on housing starts, is captured in the suspicion in the survey that prices are likely to resume an upward course over the coming year.
"The challenge is also visible in the response of the private lettings market to change to the tax treatment on investment properties. While it is understandable that the government wanted to provide a lift for first time buyers, this may well come at the cost of higher rents as the appeal of buy to let diminishes.”
Geoff White, RICS Policy Manager said: “This is one of the most complicated market situations that we have seen in some time, and with some of the working policy solutions taking a long time to get to market we’re seeing a difficult situation get worse.
“The situation in the Private Rented Sector gives great cause for concern as supply continues to drop. It would appear that new policy on taxes and Stamp Duty have made it so difficult for landlords at a time when the UK needs more homes to rent, that many continue to exit the market.
"A standardised set of regulations would go some way to help ease the life of both those renting and those looking to let, and RICS continues to ask government for greater regulation through adopting the Code of Practice used by RICS professionals and others.
“In the meantime, the government also struggles to reach its house building target. The revised National Planning Policy Framework is to be announced soon but few hold out hope it will achieve its aim of significantly speeding up planning applications and actual delivery. The Prime Minister also tasked Sir Oliver Letwin to review build out rates and alleged land banking. His interim report suggests building a greater mix of tenures – including PRS – is the answer, and we look forward to the final recommendations.
“Faced with the uncertainty around Brexit, recent government changes and a shortage of skilled trades such as bricklayers, as identified by Sir Oliver Letwin, and you can see how the new Housing Minister Kit Malthouse – the eighth person to have that title since 2010 – has his work cut out.”