UK property market hits a turning point

Countrywide

Tuesday, October 19, 2010

Countrywide's Market Insight for September 2010
Market highlights:

     

 

Sept 10 v Aug 10

3 month trend

Year to date

New rental instructions

1.78%

16.70%

10.8%

New estate agency instructions

16.21%

2.94%

12.16%

Overall mortgage applications

1%

(11.73%)

(7.34%)

Grenville Turner, chief executive of Countrywide, the UK's largest property service Group said;

Activity across the UK property market in September provides some positive signs, particularly in areas which have slowed down in recent months.

Figures from our estate agency network show that there is still a strong appetite from buyers and sellers. Countrywide's national open house event in September resulted in strong increases in both the number of new properties entering the market [1] and buyers viewing [2] but only those properties that are realistically priced to sell are doing so.

The rental market continues to go from strength to strength with the number of new rental properties increasing for the fifth consecutive month, which are now at their highest level since November 08. However tenant demand continues to outstrip supply, which is an ongoing concern but also an opportunity for lenders as buy-to-let mortgages continue to be the strongest growth area for our 700 mortgage consultants.

Overall mortgage applications rose 1 percent in September, which demonstrates that the purchase mortgage market is still active with a new wave of buyers entering the market. While the third quarter is a traditionally quieter period for the market, mortgage applications are broadly in line with overall house sales.

Remortgage applications remained at their highest levels since June 2009 for the third consecutive month, making up 22 percent of all mortgage applications.

General stability in the current market should be seen as a good thing but we need to be mindful that the economy is still in a fragile state. The next few months will be crucial as we await the full impact of the government's spending cuts on buyer confidence.

[1] Countrywide Estate Agents: New property Instructions - September 2010 vs. August 2010 (See key facts)
[2] Countrywide Estate Agents: Viewings conducted - September 2010 vs. August 2010 (See key facts)

 

Key Facts - September 2010
Mortgages:(based on the activities of the UK's largest mortgage broker with approximately 700 mortgage consultants)

  • Applications:Overall mortgage applications rose 1 percent while applications for two year mortgage terms generated the highest volume of applications at 77 percent. (A 36 percent increase compared to September 09).
  • Remortgage applications:Activity remained at their highest levels since June 2009 for the third consecutive month, making up 22 percent of all mortgage applications.
  • Buy-to-let:  Buy-to-let mortgages made up 13 percent of overall mortgage applications - up 4 percent on September 2009.
  • Interest rates:The average interest rate of Countrywide's Top 10 Mortgage Applications was 4.66 percent, up 0.12 percent from August 10.  (A 0.78 percent decrease on September 09).
  • Fixed vs. Tracker:The overall percentage of customers opting for fixed rate mortgage products has increased from 53 percent in January 2010 to 72 percent.  
  • Early indications:Please view Countrywide's Most Sourced Product Index

Residential Lettings:(based on the activities of the UK's largest estate agency & lettings network, operating 1,300 offices)

  • Rental instructions:The number of new properties entering the market rose a further 1.7 percent in September to its highest level since November 2008.
  • Tenant applications:New tenants have grown 19 percent over the last three months despite a 3 percent drop in September, an increase of 43.3 percent increase on September 2009
  • Properties rented vs. new instructions:There was a 29 percent difference between the number properties let in September compared to the number of new instructions entering the market, fuelling concerns over supply and demand.

Estate agency:(based on the activities of the UK's largest estate agency & lettings network, operating 1,300 offices)

  • New instructions: The number of new properties coming to the market increased by 16 percent compared to the previous month - up 10 percent year on year.
  • Viewings conducted:Viewings increased by 23.7 percent to the highest level since June 2010.
  • Market appraisals: The number of homeowners requesting valuations on their properties rose by 13% to its highest level since June 2010.
  • National campaign:Countrywide held the UK's largest open house weekend on the 18th and 19th September with over 13,462 homeowners taking part.

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