London and South East markets continued to cool as North and Midlands see price hikes in December
The report, which is collated from the results of a survey based on Surveyors observations of their local market, rather than house prices or transactional data, suggests that whilst the normal Christmas slow-down was evident in many areas, further price growth was reported in in Wales, Northern Ireland, the North West and the Midlands last month.
However, the disparity between these areas with London and the South East continues to grow, with prices in the Capital and commuter belt seemingly still cooling in December.
RICS members also predicted a slow start to the 2018 property market, with many surveyors suggesting that prices will remain flat or potentially cool slightly in some areas in the first quarter of the year.
That said, the overall perception of the housing market for the year remains positive with the suggestion that prices will rise, albeit modestly, over the next 12 months in the majority of regions.
Of particular interest in this months’ report was the reaction from Surveyors around the recently introduced Stamp Duty and Land Tax (SDLT) scheme for First Time Buyers, with reaction being very clearly divided over its efficacy to assist those taking their first steps on the property ladder.
Over a quarter of all Surveyors in London who responded to the survey suggested that the changes would have an impact on the market, compared to outside of the Capital, where 66 per cent of surveyors felt that the new measures would make little or no difference.
Simon Rubinsohn, RICS Chief Economist commented: “The initial feedback from the market doesn’t suggest that the change in the Stamp Duty regime announced in the budget is going to have a material impact on activity.
“Indeed, the risk was always that a good portion of the benefit would be capitalised in the price, therefore limiting the benefit for the First Time Buyer.”
Further price growth was reported in in Wales, Northern Ireland, the North West and the Midlands
The initial feedback from the market doesn’t suggest that the change in the Stamp Duty regime announced in the budget is going to have a material impact on activity
Simon continued: “Meanwhile, the latest RICS data continues to highlight the importance of disaggregating the headlines numbers when talking about the market.
“Challenges over affordability may have grown across the UK but they are clearly having a bigger impact in some parts of the country than others.
“This is clearly evident in the sales expectations figures which still remain in positive territory in more than half of the areas surveyed in the report.”
What would appear to be consistent across the UK, however, is that we still seem to be facing a shortage of properties for sale across the country as a whole, a trend which first started nearly two years ago and has been evident ever since.
That said, nearly a quarter of surveyors reported that the number of market appraisals they undertook increased in December, which perhaps suggests that many would-be sellers were using last month to understand the current value of their home, ready to potentially put their property on the market early this year.
Brian Murphy, Head of Lending for Mortgage Advice Bureau said of the report: “It would appear that Surveyors in many areas observed a seasonal slow-down in the market in December, with the lead up to Christmas and holidays having their normal impact on activity levels, which is of course within normal expectations and nothing to worry about.”
Brian continued: “Overall, national sentiment from Surveyors remains positive for the next 12 months after predictions of a cautious start to 2018.
“What’s particularly interesting to note in this months’ report is the split in opinions around the SDLT scheme for First Time Buyers which was introduced in November.
“However, it will be interesting to see how this plays out in the coming months and whether or not stimulus at entry level will have an impact further up the market, as we observed that mortgage enquiries for First Time Buyers were increased in December across the network, although of course it can take months for this to translate into finalised transactions.”
With a potential for estate agents’ pipelines to increase over the coming months, and surveyors in many areas guardedly optimistic about the UK housing market in the longer term, it will be interesting to see, how the market fares over the next quarter and if indeed as many suspect, if the real winners from the SDLT changes will turn out to be those selling, rather than buying.