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Uncertainty still having an effect

THE East Midlands housing market ended 2018 on a weak note with uncertainty still biting, alongside continuing lack of stock and affordability issues.

The region’s sales volumes dwindled in December, as fewer buyers and sellers enter the market. Looking to the next three months, sales expectations for the East Midlands also remain negative, with the headline net balance of -36 per cent representing the poorest reading since May 2008. The 12-month outlook has also subdued.

In terms of prices, the headline indicator slipped slightly in December, falling to +11 per cent from +20 per cent in November. In the near term, however, respondents anticipate prices to fall but remain more optimistic at the twelve month outlook, suggesting that some of the near term pessimism is linked to the lack of clarity around what form of departure the UK will make from the EU in March.

Tom Wilson, MRICS, of KingWest in Stamford, said: “Brexit has reduced liquidity through both vendor and buyer uncertainty without question. People do not appear to be moving unless they have to.”

Domestic issues related to the lack of supply and affordability continue to affect buyer and seller confidence in the regional market. Interest from would-be buyers remains in negative territory in December and the number of new properties being listed for sale continues to fall. Given the cautious nature of would-be buyers and potential sellers, it is little surprise that stock levels on estate agents books are close to record lows in the region, with an average of just 51 properties per branch.

Chris Charlton, FRICS, of Savills in Nottingham, commented: “December was a slow end to the year and the lack of new instructions looks like setting the tone for 2019. However, there are a good number of registered applicants searching for that elusive new house.”

Furthermore, supply issues also remain evident in the lettings market, as landlord instructions also declined once again, rounding off a year in which they have fallen in all bar one of the 12 months.

Simon Rubinsohn, RICS Chief Economist said: “It is hardly a surprise with ongoing uncertainty about the path to Brexit dominating the news agenda, that even allowing for the normal patterns around the Christmas holidays, buyer interest in purchasing property in December was subdued. This is also very clearly reflected in a worsening trend in near term sales expectations. Looking a little further out, there is some comfort provided by the suggestion that transactions nationally should stabilise as some of the fog lifts, but that moment feels a way off for many respondents to the survey.

“Meanwhile it is hard to see developers stepping up the supply pipeline in this environment. Getting to the government’s 300,000 building target was never going to be easy but pushing up to anywhere near this figure will require significantly greater input from other delivery channels including local authorities taking advantage of their new-found freedom.”

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