Brokers and market analysts have played down suggestions from an estate agency group that the UK property market has neared its price rise limit.
Haart, which according to its website has more than 100 branches across the country, found UK house prices rose 12 per cent between April last year and and April 2016, to reach an average of £234,069.
Paul Smith, chief executive of Haart, said despite a “roaring month” in April, which saw prices rise 1 per cent, he was also starting to see a big slump in buyer demand, with registrations down 46 per cent across the UK in just one month.
“We believe the nation has now neared the limit in terms of price rises. Our data is already showing a slowdown in both house price growth and transaction levels.”
He warned in order to maintain healthy sales levels, sellers need to be much more realistic with their asking prices, as properties are in danger of being overvalued.
HM Revenue & Customs data confirmed the slump in residential transactions between March and April, showing a fall of down 45.2 per cent, while the seasonally adjusted figure for last month 14.5 per cent lower compared with April 2015.
The Revenue service put the fall down to a correction after the sharp increase in transactions in March, running up to the buy-to-let stamp duty increase deadline at the end of that month.
Brokers and market analysts have disputed Mr Smith’s suggestion the slump pointed to a wider issue about the property market being overvalued.
Rachel Springall, spokeswoman for the Moneyfacts Group, said property prices will stay volatile while there is a demand for the houses.
“Until there are a sufficient number of homes built in any given area, certain properties can fetch a high price and London is the best example where properties can be far out of most people’s price range.”
Taking into account the impact of a possible vote to leave the EU, Ms Springall noted uncertainty in the property market is likely to deter both sellers and buyers, as they edge on the side of caution.
“There is also the point of affordability, so regardless of in or out of the EU, there will be buyers priced out of certain homes and sellers who are not prepared to drop asking prices. The term ‘generation rent’ is likely to be with us for sometime yet.”
Daniel Bailey, mortgage adviser at Derbyshire-based Middleton Finance, suggested it is regional, as in the north of England where he arranges most mortgages, prices are still not at pre 2008 levels.
“I still expect a steady growth for the rest of the year. There is still appetite to buy, mortgage availability is good and there is still a lack of property on the market,” he added.
peter.walker@ft.com
