In a month underpinned by highly motivated buyers, we saw little evidence of August being quiet due to the summer break. Last month’s data suggests that many homeowners decided to take the opportunity to review their finances and remortgage, or were motivated to move home. We saw the UK property market continuing at a steady pace, very much in line with previous months with only a slight movement on some key metrics, consistent with seasonal expectations.
Key indicators are:
•Average purchase price only slightly lower in August than July, dropping by 1.2% month on month
•Marginal change in remortgage loan size, increasing by 0.6% month on month
•Average FTB property purchase price decreased slightly to £208,994 in August 17, from £209,864 in July 17
Mortgage Advice Bureau data is based upon mortgage applications, therefore this provides a reliable barometer in terms of consumer activity.
Going into the summer months, many had expected to see a marked dip in both activity and prices across the board, due to a combination of anticipated consumer concern with regards to the current political climate, and also economic factors such as slow wage growth hampering affordability.
Whilst these factors have perhaps seen discretionary buyers leave the market for the last few months, we are still seeing a healthy number of those purchasing due to life circumstances, e.g. moving home due to work or family factors, together with a noticeable upswing in First Time Buyers taking advantage of the fact that fewer landlords are adding to their portfolios at the current time, meaning that there is less competition for entry level stock in many areas of the country. These factors have led to the volume of residential transactions remaining steady for the last three months (June, July, August) at over one hundred thousand transactions per month.
Of course, it’s normal to see a slight cooling in house prices over the summer months, as typically it’s a quieter period with properties taking longer to sell, therefore vendors tend to price slightly more competitively in order to secure a buyer. However, in some areas of the UK, an upwards movement in pricing has been observed, supporting the fact that prices remain robust in a number of towns and cities.
With independent industry bodies such as RICS suggesting in their latest residential market survey that they anticipate the current levels of available stock across most parts of the UK to remain at current historically low levels for the foreseeable future, it’s likely that as we move into the start of the autumn the current constant picture will remain, perhaps assisted by those who are now looking to ensure that they are moved into their new home and settled before Christmas.
To read more about this month's National Mortgage Index, click here.
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