I wrote earlier this week that right now there are so many potential triggers for a fall in house prices from their mysteriously high levels, that it is hard to see the market making it through the summer unscathed. (What will trigger the fall in house prices?)
But it seems that in my list of potential nasties I missed one obvious one – the end of home information packs (Hips). This spring has already seen a 78% rise in the supply of new property coming on to the market, according to Henry Pryor, who spends hours pouring over these statistics: 121,000 houses hit the market in March alone.
But that, it seems, was just the beginning. Rightmove, which lists around 90% of all properties for sale in the UK, says that the number of new listings on its site went up 35.4% in the seven days after Hips were ended. That makes last week the website’s busiest week ever.
Part of that rise in supply is probably still down to second-home owners and buy-to-letters hoping to get shot of their houses before capital gains tax rises, but the sheer volume of the new listings does suggest, as Rightmove’s Miles Shipside says, that the “additional cost and red tape” of Hips was putting sellers – and speculative sellers in particular – off.
Either way, it all adds up to an awful lot of houses looking for buyers at a time when the mortgage market is still very tight.
Not only are borrowers still having to provide large deposits to get their hands on good mortgages (56% of products still require at least a 25% deposit) but we are increasingly hearing of banks introducing draconian conditions to exclude borrowers. Nationwide, for example, has said that it will no longer lend on ex-council flats or on maisonettes in buildings more than five stories high. It also won’t lend on houses or flats built in the last 12 months, says the Mail.
No wonder, to quote the Bank of England, the availability of mortgage finance continues to “suppress demand for houses among first time buyers.”