The latest housing market snapshot from the listings website Home suggests more regional markets are heading for price corrections.
Home says that while prices nationally are holding “remarkably steady” despite the long-running Brexit saga, there are areas for concern.
Sudden supply drops are apparent in many regions and, nationally, supply is down 17 per cent year-on-year as approximately one in six vendors sits on their hands.
“The East of England remains in the grip of the inevitable post-boom price correction … the South East also has yet to exit a period of negative growth … meanwhile, increasing Time on Market figures and vanishing growth indicate that the East and West Midlands property markets are heading for their respective price corrections” it says.
And the site warns: “2020 portends a painful period of correction after many years of excessive growth [for the Midlands] since October 2012, although the current drop in new instructions may forestall the inevitable correction by several months.”
Annual price growth across England and Wales is running at a meagre 0.1 per cent, says Homes; a year ago it was 0.6 per cent.
“Brexit jitters have slashed supply across the UK. No one predicted this: a result of extreme caution on the part of potential sellers. Non-committal vendors are, through their inaction, cutting off supply” warns Home’s director Doug Shephard.
“Supply in the (possibly more Brexit-hysterical?) English capital has fallen off a cliff. One in three potential vendors failed to commit last month in London. Consequently, stock levels are falling rapidly, thereby creating (at least for the time being) a mismatch between supply and demand, which is pushing up prices” he adds.
Shephard believes this represents relatively good news for the capital after a sustained period of negative growth.
“There is relatively very little to choose from and competition will be fierce, especially in London, exactly where the first green shoots of recovery are already showing. The flashing green light of rising rents indicating a revitalisation of the London market has been apparent for several months … and, to date, a total of seven London boroughs are showing double-digit growth. Why rents? Because investors know that rents fundamentally underpin the value of property.”