Miles Shipside, commercial director of Rightmove comments: "We observed last month that rising prices and more properties coming to market would be unhappy bedfellows in the long-term. This month we are seeing signs that the relationship is under increasing stress. Sellers are starting to reduce their pricing expectations to court the fewer buyers who are able to proceed, though the number of buyers who can purchase is too low to bring volume back to the housing market."
Rightmove's quarterly Consumer Confidence Survey polled potential movers at the start of the year, asking whether the election would affect their moving plans. A resounding 70% said it would not, and this surge of new sellers so close to the election bears that out. Potential buyers remain in a difficult position however, with lenders' deposit requirements and credit-worthiness criteria still marginalising a large body of would-be home-movers.
One of the many issues for the new Government is to review the 'broken' housing market. The previous Government's target of 3 million new homes by 2020 was aimed at meeting projections for growth in the number households. This target is now in tatters with the industry struggling to build even 100,000 homes this year. Assisting higher new-build and resale housing transaction volumes is likely to be an important consideration as part of a consumer-led recovery.
Shipside concludes: "The new coalition Government faces a tough challenge in fixing the 'broken' housing market. This may become increasingly difficult if the Greek illness turns into a European pandemic causing a relapse in the condition of the financial markets. There is also the looming issue of reducing public sector spending by 6 billion pounds. This will have an impact on the financial position of thousands of employees whose jobs depend on the public sector and a resulting knock-on effect on the health of the housing market."
