The UK housing market suffered its first price decline in eight years in September (since the last decline in 2010), according to Rightmove (LON: RMV), the UK’s largest property website.
The announcement came as average property prices fell by 0.2% or £730 compared to August. It’s an anomalous change from the expected trend in home price increases in September, which usually marks the start of autumn.
Miles Shipside, director at Rightmove, said the changes (are you tired of hearing this?) come as the UK continues to be uncertain about Brexit, with both buyers and sellers concerned about Prime Minister Boris Johnson’s decision to leave the EU without a deal. He said this is because he is waiting to see how his refusal to take the matter off the table will develop.
Shipside commented in today’s release:
“Since the referendum over three years ago, many people have adjusted to living in uncertainty and are making good progress in making their living and housing moves,” Mr Shipside said.
“However, as another Brexit deadline approaches, there are signs that some may be hesitant due to increased gnashing of teeth.”
According to the company, the number of new properties that entered the market in September was down 7.8% and 5.5% in all regions compared to the same month last year.
“In August we reported a pre-Brexit buying spree, with the number of agreed sales increasing by more than 6% year-on-year, as buyers and sellers decided to secure deals well in advance of the next Brexit deadline.”
“However, a month later, as the deadline approaches and tensions increase, the number of sales agreements is more than 5% lower than a year ago, with significant fluctuations in the opposite direction.”
The decline in activity was seen across the country, but was felt most markedly by the 20% plunge in new properties entering the London market.
On housing trends, auditing firm KPMG says house prices could fall by 20% if Prime Minister Boris Johnson pursues a no-deal Brexit, with the biggest declines occurring in Northern Ireland, London and the South East. He said it was possible. KPMG said it expected a 6% decline nationally in 2020 under the same scenario, but added that a 10-20% decline is “not out of the question” due to weak market sentiment.
Elsewhere in real estate development and real estate brokerage news, you’ll find the latest updates on: Berkeley Group Holdings Ltd (LON: BKG), Redrow plc (LON: RDW), U+I Group PLC (LON: UAI), Hunters Property PLC (LON: HUNT), GCP Student Living plc (LON: DIGS), Barratt Development Plc (LON: BDEV) and Belvoir Group PLC (LON: BLV).
Rightmove shares are currently trading at 536.60 pence per share (16/09/19 08:10 BST), down 1.01% or 5.50 pence. Mr. Peel Hunt reiterated his stance of “reducing” his stake in the company’s stock. The group’s P/E ratio is 29.57 times and the dividend yield is 1.20%.
