Average property prices continued to rise everywhere in the country apart from London in the past month, new findings have suggested.
But despite remaining open throughout the latest lockdown, the property market has started off 2021 on a ‘weaker footing’, with sales, listings and interest from prospective buyers waning, the Royal Institute of Chartered Surveyors said.
One property insider said his estate agency in Tenbury Wells, Worcestershire endured the quietest January on record, with a lot of stock not selling because it was ‘priced in expectation rather than reality.’
On the sales front, the East Midlands, South West and Yorkshire and the Humber all struggled in recent weeks, while Northern Ireland held firm.
State of play: Charts showing how property sales have fallen as prices remain high
The Rics said sales looked set to remain ‘subdued’ over the next few months, with the outlook for further ahead ‘flat.’
Richard Franklin, a director at Franklin Gallimore estate agents in Tenbury Wells, said he had endured the ‘quietest January on record.’
He added: ‘There are few listings in all sectors. Overpriced stock is just sitting there, priced in expectation rather than reality.’
Another industry insider, Ian Morton, a director at property consultants Bradburne & Co in St Andrews, said: ‘Lockdown has deterred sellers from placing their property on the market until restrictions are eased.’
He said prospective buyers were ‘window shopping’ during their daily exercise breaks or online, but were hesitant to view homes in person amid ongoing restrictions and concerns over the end of the stamp duty holiday.
Kirsty Keeton, a director at Richard Watkinson & Partners estate agents in Newark, Nottinghamshire, said: ‘Instructions have slowed which will result in lack of supply, due to high infection rates and home schooling.
‘There is potential for a surge when lockdown eases with the spring market.’
Meanwhile, in the normally bustling city centre of Manchester, Lawrence Copeland, of Lawrence Copeland estate agents, said the area’s property market was being hit by a lack of ‘transient’ buyers from Britain and overseas, meaning it was missing around a quarter of its typical buyer base.
Simon Rubinsohn, chief economist at the Rics, said the latest lockdown had had an ‘inevitable’ impact on activity in the property sector.
He added: ‘That said, actual transaction numbers will remain firm over the next couple of months reflecting the completion of deals that in many cases were agreed through the back end of last year.
‘The appeal of properties with more room and outside space is, meanwhile, a theme that continues to be strongly evident in the responses to the survey.’
Predictions: House price predictions across the UK over the coming months
Variations: Rics’ house price predictions suggest that some areas may fare better than others
Prices: Rics data on property price shifts by region over the past three months
What’s been happening in the property market?
A growing number of estate agents said they saw queries from prospective buyers fall in the last month.
The Rics said: ‘This latest return brings to an end a run of seven consecutive positive monthly readings beforehand, and is consistent with a noticeable drop-off in demand.’
The number of properties coming up for sale has also started falling for the first time since May last year.
A rising number of estate agents also said they had seen sales drop in the past month, and while this often happens in January, the current lockdown has exacerbated the situation.
Capital woes: Property prices in London fell last month, according to the Rics
But, while listings, buyer interest and sales have fallen, property prices have continued to rise ‘firmly’ in almost every part of the country, with the exception of London, where they have fallen.
On London’s market, the Rics said: ‘This marks the first negative reading for the survey’s measure of price growth across the capital since July 2020. ‘
A growing number of experts questioned in the latest Rics survey said they expected prices to continue rising in the year ahead, with price growth set to be particularly strong in Scotland, Wales and Northern Ireland.
At the end of March, the chancellor’s stamp duty holiday comes to an end, but some property insiders are calling for it to be extended to give the sector a helping hand as the pandemic rolls on.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.