Is the market turning? Momentum slowing down, report surveyors

The first monthly market monitor to show activity in the housing market tailing off has appeared - and it says momentum has “slowed significantly.”

The e.surv monthly house price index comes with a warning from director Richard Sexton: “House prices continued to rise month on month through October, however the momentum has slowed significantly. Between September and October, average house prices increased by 0.9 per cent, the slightest monthly increase since prices began to rise in June this year.”

He doesn’t speculate as to whether the slowing is down to the current England-wide lockdown, general economic concerns, or a belief amongst some potential purchasers that if they were to buy they may fail to complete before the end of the stamp duty holiday.

“Despite the slowed growth, average property values still stand 4.4 per cent higher than this time last year. This increase is still thought to be largely buoyed by the purchase of the bigger, and often more expensive, homes” he adds.

The monthly snapshot - which says the average home in England and Wales now costs £314,643 following a 4.4 per cent rise in the past year - warns of possible trouble ahead. 

It says: “There is already clear evidence of the slowing market, despite the pressures imposed by the deadlines for completion before March 2021. Strip those out and the market might begin to look a lot less buoyant.”

And it goes on: “There is clear evidence of a widespread slowing in the market, albeit that positive increases in prices are still being recorded … While the market may be coping now, looking ahead it does get more challenging. Come March there will be a perfect storm arising with the end of the current Help to Buy scheme, the stamp duty holiday and the furlough support measures. Implicit in all of this is the hope that by then lockdown will have ceased and the economy is starting to recover.”

e.surv directly addresses the apparent perception that the housing market is still storming ahead while this index suggests a slowdown.

It says: “In October three [other] indices are showing a fall in their monthly rates compared to September, with just Rightmove reporting an increase of 0.9 per cent above its September rate. As Rightmove is based on ‘asking’ prices as opposed to achieved values, might this suggest that sellers’ expectations are too high in the current climate?”