House prices still on the rise across Yorkshire, but buyers apply caution

Demand for properties from new buyers across Yorkshire and Humber fell during the last month, recent statistics have shown.

This has resulted in more surveyors in the region expecting sale levels to dip over the next 12-months, according to the September 2018 Royal Institution of Chartered Surveyors' UK residential market survey.

Only two per cent of respondents received more enquiries from potential buyers during the month.

At the same time, the number of newly agreed sales fell last month, and the volume of new sales instructions dwindled for the third consecutive month.

Twenty-one per cent of respondents said they are expecting sales to fall over the coming 12-months as average stock levels on estate agents’ books remain close to record low levels, with limited choice as one factor hampering demand.

Regionally, the sales trend is flat to slightly negative in virtually all parts of the country. Northern Ireland and Wales were the only areas reported to have seen a rise in sales during September, and this was relatively modest.

Overall, Yorkshire and Humber’s respondents to the survey claim it is a mixture of affordability constraints, a lack of stock, economic uncertainty and interest rate rises that are holding back activity.

Looking at house prices, 38 per cent of respondents in Yorkshire and Humber saw prices rise during the month of September (up from 24 per cent the previous month) most likely due to a lack of stock on the market.

Respondents in London continue to report the steepest fall in house prices on a regional comparison, whilst the South East and East Anglia deteriorated a little further in September. Elsewhere house prices continue to rise firmly, with the West Midlands, Northern Ireland and Scotland posting the strongest growth.

James Brown MRICS, of Norman F Brown, said: “The seasonal slow down will start to kick in soon and along with Brexit, uncertainty does not paint a good picture for the housing market for the remainder of the year.”

In Yorkshire and Humber’s lettings market, tenant demand fell (on a non-seasonally adjusted basis) with just five per cent of respondents seeing a rise in enquiries from potential tenants.

Set against this, landlord instructions to let remain in decline, with 42 per cent of agents reporting a fall in new rental property coming onto the market. Rental projections for the year ahead point to growth of just over two per cent, with this rate anticipated to accelerate, averaging around 3.5 per cent per annum, over the next five years.

William Marshall of Adair Paxton said: “The ban on lettings fees will most likely be passed on to tenants through rent increases. A better idea would have been to set a cap on fees chargeable.”

Simon Rubinsohn, RICS Chief Economist, said: There are a number of themes running through the comments of respondents this month but uncertainty relating to Brexit negotiations is at the very top of the list followed by references to the confidential remarks made by the Bank of England Governor to the cabinet. All of this is not surprisingly taking its toll on the sales market in all parts of the country.

“That said, the recent announcement from the Prime Minister that the Housing Revenue Account borrowing cap will be abolished is a bold move which over the time could help address some of the very real challenges facing those looking to buy or rent property. There is no silver bullet that will immediately resolve this problem but encouraging new entrants to deliver affordable homes is certainly part of the answer.”