UK housing market remains resilient despite market woes


Tuesday, August 16, 2011

Countrywide Market Insight report - July 2011

The UK housing market remains resilient with modest improvements across key market indicators as seasonality and conditions in the economy continue to affect market activity; according to Countrywide, the UK's largest estate agency and property services Group.

The report, which looks at the previous month's performance of all business streams within the Group, shows that buyer enquiries in the sales market and the number of viewings conducted rose marginally; resulting in a 2.2 percent monthly increase in the volume of house sales agreed, providing some impetus to the market.   

In line with seasonal trends, the number of market appraisals carried out dipped by 1 percent, yet the number of sellers listing their properties remained the same as the previous month. This indicates that those homeowners that are serious about selling and have realistic price expectations remain confident about selling in the current market.

In the private rental sector, demand continues to increase and the number of property viewings carried out by tenants increased by 6 percent in July - the fourth consecutive monthly increase. The number of new tenants registering for rental accommodation remains consistently high, currently leaving four tenants vying for each property as we enter the peak season.

The average interest rate on purchase mortgages applied for in July by Countrywide customers continues its decline reaching 4.22 percent, a fall of 0.9 percent in the month, with the average loan size at 75 percent - the highest it has been for over three years. In comparison, the average LTV of mortgages applied for in the same period last year was 71 percent and at a rate of 5.32 percent; highlighting the increasingly competitive rates and higher LTV products now being offered by lenders.

Applications for fixed rate mortgages dominated Countrywide's Top 10 Most Popular Mortgages[1] index with all ten being fixed rate products. In contrast, in the buy-to-let sector, fixed rate mortgages made up 67 percent of all buy-to-let mortgage applications - the lowest percentage since December 2010. This sharp monthly fall of 9 percent reflects the increase in the number of investors choosing to take advantage of the competitive variable rate products of offer as market commentators anticipate interest rates to remain at historical lows over the coming months.

Grenville Turner, Chief Executive of Countrywide, the UK's largest property services Group, said;
"The housing market continues to be robust with both transaction volumes and sale prices remaining broadly stable. As the UK economy continues to face considerable challenges, lending volumes are not likely to substantially improve until well into 2012. The size of the deposit remains the biggest issue facing consumers, not affordability of the loan itself. Whilst lenders offer increasingly competitive rates to potential borrowers, more help with the size of their deposit would be more attractive right now."

Market Insight - July 2011
NB: As theUK's largest property services Group, Countrywide compares its monthly and year on year performance figures to provide a unique insight into theUK property market.

Mortgages:(based on the activities of theUK's largest mortgage broker with approximately 650 mortgage consultants)

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

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

[1] In May 2010, property instructions spiked as Home Information packs were scrapped by the Government.

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