UK homeowners are now asking for 0.2% less than they were in May 2018, while the latest national index also shows that supply has decreased by 9%.
Indeed, the report from Home.co.uk suggests that the 0.5% rise in the average house price across England and Wales was mainly due to seasonal factors, and this has since been undermined by the low number of market participants.
It adds that while prices in Wales, Scotland and all regions of England grew month on month, this was driven more by seller optimism rather than buyer demand, and stock levels have risen by just 1.7% year on year.
Meanwhile, the annual losses seen in London have reduced slightly from 3.1% to 2.9%, taking them to a total of 6.7% since prices began their decline back in May 2016. Asking price falls in the South East continued to ease to 1.5% year on year but worsened in the East to 3%.
Additionally, the only regions to see supply increases were in the East and West Midlands, both up 3% with an increasing number of vendors withdrawing from the sales market across several other regions. The report suggests that the market is likely to remain unchanged from the 1.1% growth recorded a year ago.
Greater London and the East of England appear to be experiencing particularly harsh slowdowns, with average time spent on the market up 23% and 25% respectively. Other hard hit regions are the South West and the South East, both up 20% year on year.
May 2019 has in fact been the slowest May since 2014, with homes typically spending 89 days on the market in England and Wales – an increase of 11 days on May 2018.
The report also suggests that the continued Brexit uncertainty is to blame for the crisis of both buyer and seller confidence in London, with falling demand meaning that properties are now staying on the market 23% longer. Indeed, the capital’s housing market is now functioning at its slowest for some 10 years.
At the same time, the reluctance to commit shown by vendors has seen supply drop by 28% year on year, with the report citing a ‘post-boom malaise’ as well as economic uncertainty as reasons why property sales are down.
‘A wait and see attitude is stifling both supply and demand. So far, these exceptional strains on the market have had little net effect on the established pricing trends but home values appear to be levitating, based more on aspiration than any real underlying market fundamentals,’ the report points out.
‘Spring optimism has managed to lift prices in all the English regions, Wales and Scotland, although this appears to be driven by wishful thinking on the part of a reduced number of vendors rather than by demand, as properties spend longer and longer on the market,’ it adds.