The price of property coming to market fell 0.9 per cent (£2,647) this month, according to Rightmove, which suggested this was within usual expectations for the run-up to the summer holiday season.
Since 2010 the month of July has recorded average price falls of 0.4 per cent.
The estate agent’s latest figures covered the two weeks pre and two weeks post the European Union referendum, giving an early view of how the turmoil of the UK’s decision to vote for a Brexit effected the property market.
Buyer demand was roughly consistent with 2014, although enquiries were down 16 per cent on 2015, as the same period last year benefitted from a post-election boost.
Most agents reported market momentum continuing due to a shortage of suitable property for sale, stated Rightmove, adding that buyers are fearful of missing out on scarce choice, along with the affordability and availability of low mortgage rates.
Meanwhile, sellers seem undeterred – compared to the same period last year, the two weeks pre-referendum saw the number of new properties coming to market down by 8 per cent, while the two weeks post-referendum saw them up by 6 per cent.
Miles Shipside, Rightmove’s director and housing market analyst, said while the housing demand and supply imbalance remains a long-term problem in many parts of the country, in the run-up to and immediate aftermath of the referendum there was an understandable drop-off in buyer enquiries.
It is clear that demand for property still exceeds the housing supply on offer, just as it did before the referendum. Jeremy DuncombeMr Shipside said: “Buyer enquiry levels in the two weeks after the Brexit vote are now consistent with the same period in 2014, which is a more comparable benchmark.
“Housing markets do not like uncertainty, with positive sentiment typically driven by confidence and momentum, supported by low borrowing costs.
“There seems to be little prospect of an increase in historically low mortgage rates in the short to medium term, with even greater certainty readily available with increasingly competitive five-year or even ten-year fixed rates.”
Mr Shipside added that agents in areas where stock shortages were driving momentum before the referendum say activity has recovered quickly, with buyers’ fear of losing a scarce property a key factor.
Jeremy Duncombe, director of the Legal & General Mortgage Club, said it is best to look at the annual trend in house prices, rather a month in isolation.
He said: “House prices are still rising faster much than inflation over a 12 month period, and a slowing of this growth is not necessarily a bad thing.
“It is clear that demand for property still exceeds the housing supply on offer, just as it did before the referendum.
“The recent report from the House of Lords calling for 300,000 new homes to be built per year will provide some much-needed pressure in this area.”
peter.walker@ft.com
