June saw new instructions decrease by a third year-on-year, while new applicants increased by 50 per cent, but they are clearly registering to prepare for the autumn market. The fact that stock levels remain the same shows that things are somewhat quieter and we have not seen the hoped-for post-Election lift yet. This lift presupposes sellers have made their minds up over what they want to do during the summer, but the buyers are ready.
Overall, house price rises remain predicated on a lack of stock and this pattern looks set to continue for the foreseeable future.
Stamp duty increases in the higher price ranges, with Battersea Park used as a typical example in our recent Emerging Prime Index, and some pre-Election uncertainty has caused larger family houses to stall with prices down approx. 10 per cent year-on-year. The loosening of mortgage finance could well see this change over the next few months.
The July Budget has seen the prevailing uncertainty in the sales market transferred to the lettings market. Reduced tax relief coupled with an overhaul of the wear and tear allowance could spark rent rises as landlords attempt to recoup losses on already limited rental yields, trapping tenants in the rental market as they struggle to raise a house deposit.
Landlords are also likely to have to refocus with greater emphasis placed on house price growth and not income. We would like to see the Government taking a more holistic view of the market.
|DOUGLAS & GORDON: AVERAGE LONDON SALES PRICE INDEX|
|Q3 2014||Q4 2014||Q1 2015||Q2 2015|
|1 bed flat||£544,500||£537,191||£542,025||£552,703|
|2 bed flat||£847,083||£835,120||£840,381||£852,314|
|3 bed house||£1,787,500||£1,758,722||£1,777,063||£1,800,698|
|4 bed house||£2,618,750||£2,557,237||£2,557,492||£2,582,555|