Have we hit the top of the housing market? That is certainly what the doom-mongers would have us believe and the figures don’t exactly paint a pretty picture.
The latest Halifax house price index shows that house prices fell 1% in June - the largest monthly fall since January - and yesterday’s RICS UK Residential Market Survey suggests that not only has price growth lost momentum across the south of the country but there has been a decline in both the number of new buyer enquiries and new instructions.
The evidence appears to be mounting, and perhaps most compelling of all is the news from our roving contributing editor, David Parsley, that he has just bought a house - and as he wryly notes, every time he buys a house, the market collapses.
Now he is not one to knowingly understate his case, but in this instance he does seem to have a point. He first bought in 1994 and a year later, prices were down 5%. He bought again in 2007. We all know what happened in 2008. Could his timing be bang on yet again? And if it is, are we in for a slight correction, a significant fall or the worst-case scenario, a crash?
Savills’ Lucian Cook concedes that the outlook is bleaker than it was at the start of the year, when the firm predicted two years of minimal price growth. “We’re talking about zero price growth now,” he tells me. “Whether you’re above or below the line depends on sentiment and that depends on the news agenda.”
‘Shallow correction’
However, he notes, there is no excess of supply over demand, so we are more likely to see flat growth or a shallow correction than anything more severe. The downside is that the slow growth could go on for longer than expected as we are not as far through the Brexit negotiations as we thought we would be and there is now greater political uncertainty than had been envisaged, thanks to the hung parliament.
The picture should become clearer as the negotiations progress. Needless to say, the outlook will be high on the agenda at this year’s RESI Conference, which - and I would say this but it’s true - is set to be the most relevant and important RESI yet.
As well as the Brexit effect, we will be asking what the shock outcome of the general election means for the housing white paper and what lessons need to be learned from the Grenfell Tower tragedy. The burgeoning build-to-rent sector, stamp duty and the role of proptech in revolutionising the residential sector will also be debated - and visit resiconf.com to find out more.
In the meantime, Parsley says he has no intention of moving for at least a decade, by which time he will be ready for the next house price crash/correction…
Northern powerhouses
How to increase housing provision is also one of the many challenges facing Steve Rotheram, Liverpool’s new metro mayor.
If anyone was in any doubt about the role property is playing - or will play - in delivering on the ‘northern powerhouse’ agenda, they won’t be once they have read our bumper 11-page North West special. Suffice to say, it’s not looking grim up north at all.
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