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The property market is cooling off. June data from Rightmove reports a UK rise of just 0.1%.
Some regions experienced falls, including a 0.5% drop in London following a surge in supply in the capital.
Miles Shipside, Rightmove director and housing market analyst comments:
“The London market powers the rest of the UK but is starting to run out of steam. While the legacy of rises in central London continues to ripple out to its better-value commuter-belt, fuelling price increases in all southern regions, London itself is now marking time. It’s an example to the rest of the country of what happens when affordability and common sense get stretched too far. Through luck or judgement it appears that the timing of the Mortgage Market Review, more property for sale in all regions, and a tail-off in pent-up buyer demand are alleviating some of the upwards price pressure. This will come as a relief to the Governor of the Bank of England and the Financial Policy Committee, who have cited an over-heating housing market as a serious threat to economic recovery and have further powers to use should it get out of hand."
He goes on to say
“The Bank of England has now reported three consecutive months of falling mortgage approvals and a major factor in this is the clumsy and apparent over-zealous implementation of MMR. It is certainly causing a major headache for some estate agents with U-turns by lenders meaning sales falling through and heartache for buyers and sellers who thought they had a deal agreed. The MMR deadline has occurred at the busiest time of the home-buying year, without a co-ordinated consumer communication plan, and some ill-prepared lenders are struggling with new underwriting rules, shortages of appropriately qualified staff, and the work involved in processing the additional paperwork. When they do all get to grips with it, there is the possibility that this will turn out to be more of a temporary lull rather than a major reduction in demand. However, at present it offers the FPC a reason to delay more stringent measures and hope that the balance between demand and supply is heading to a level where the more rampant price increases are being controlled.”
“The Bank of England has now reported three consecutive months of falling mortgage approvals and a major factor in this is the clumsy and apparent over-zealous implementation of MMR. It is certainly causing a major headache for some estate agents with U-turns by lenders meaning sales falling through and heartache for buyers and sellers who thought they had a deal agreed. The MMR deadline has occurred at the busiest time of the home-buying year, without a co-ordinated consumer communication plan, and some ill-prepared lenders are struggling with new underwriting rules, shortages of appropriately qualified staff, and the work involved in processing the additional paperwork. When they do all get to grips with it, there is the possibility that this will turn out to be more of a temporary lull rather than a major reduction in demand. However, at present it offers the FPC a reason to delay more stringent measures and hope that the balance between demand and supply is heading to a level where the more rampant price increases are being controlled.”
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