June 2017

Many commentators have argued that the general election increased caution in an already cautious housing market and that there are now some observably positive signs regarding housing supply in the offing.

The underlying picture, however, remains one of sales volumes declining year-on-year and with no respite and prices rising at an increasingly slow rate. Although London, for example, still showed a month-on-month house price rise, when a number of boroughs within it are examined, such as Lewisham and Hillingdon, prices have actually fallen, by 2.3% and 0.5% respectively month-on-month.

The Government's Queen's Speech made passing reference to housing but there were no new legislative measures announced, simply an acknowledgement of the scale of the problem the country faces, which is very disappointing for housing campaigners and stakeholders in general.

According to the Bank of England's most recent statistics, there was a very small increase - 0.2% - in the number of residential mortgages granted for May compared to April (65,202 vs 65,051), but a considerably larger rise in remortgages granted - 5.9% - in the number of remortgages granted for the same period (42,955 vs. 40,437). On the face of it, this might imply that people are staying put and making home improvements rather than moving home, however the unknown here is the number of cash purchases being made to buy homes, particularly because overseas investors most often buy with cash.

The Government recorded 39,520 new build completions in the first quarter of 2017, giving an average for each month (January, February and March) of just over 13,173. The monthly average for the previous quarter (total 36,320) was 12,106, equating to an 8.8% increase. Between October 2016 and March 2017, the overall number of mortgages granted decreased from 67,457 to 66,267 or a decrease of 1.8%. This leaves open the possibility that the vast majority of new builds may be being bought for cash and a large proportion within that representing overseas investors, certainly not first time buyers, unless the latter have suddenly become far richer than might normally be expected..

[NB Sales volumes and price data below are taken from the most recent figures available from the Land Registry's House Price Index, which describe price data up to April 2017 and sales volumes up to February 2017.]

Month-on-month, sales volumes were up slightly in England & Wales by 0.6% but down for London by 5%. Year-on-year, however, sales volumes have continually fallen for the last 11 months for both regions.

Regarding prices in England & Wales, prices rose by 1.5% last month and year-on-year, prices rose very slightly by 5.6% compared to last month's year-on-year rise of 4.8%. For London, prices rose by 0.7% month-on-month and by 4.6% year-on-year compared to last month's year-on-year rise of 3.2%.

The average house price in England and Wales is presently £231,269 and in London it is £482,779.