Buyers emerge from hibernation as price growth slows
However, according to the Nationwide House Price Index, signs of buyer demand suggest Brexit uncertainty is passing and buyers are keen to lock in to low fixed rates.
UK house prices increased by 0.1% in November, after taking account of seasonal factors.
The growth rate is down from 4.6% in October. Despite this, Nationwide’s chief economist Robert Gardner said growth is still in line with the rates prevailing since 2015.
“There are some signs that, despite the uncertain economic outlook, demand conditions have strengthened a little in recent months, reflecting the impact of solid labour market conditions and historically low borrowing costs,” said Gardner.
“Mortgage approvals increased in October, and surveyors report that new buyer enquiries have increased modestly. The relatively low number of homes on the market and modest rates of housing construction are likely to keep the demand/supply balance fairly tight in the quarters ahead, even if economic conditions weaken, as most forecasters expect.”
He cited Council of Mortgage Lender figures showing that more than 90% of new mortgages contracted in the last 12 months are on fixed rates, rising to 95% for the first-time buyer population.
Founder and chief executive of eMoov.co.uk Russell Quirk said the UK property market has weathered a difficult year, with prices maintaining an upward trend. However, buyer interest has come at a seasonally quiet point in the cycle.
“It would seem that UK buyers are setting a tentative first foot out of their post-Brexit foxholes with a modest increase in new buyer enquiries just as home sellers, who have remained prominent in the market all year, decide to avoid this seasonal property cold snap and go into hibernation until 2017,” he said.
He added: “The market will now see stock levels plummet as many choose to put their sale on hold over the festive season and resume their marketing in the New Year. We expect this might see a drop in prices at the last hurdle for 2016 in the December index, although this will be far from unusual and nothing to panic over.”