State of the UK Housing Market

With the housing market continuing to struggle, as reports indicated in June, providing up-to-date advice is key to ensure a successful transfer to your employee’s new host location. SIRVA is happy to share the below to help you understand the latest in UK housing.

UK Sales Market

As demand in the home sales market failed to pick up, more surveyors reported a decrease in sales price, according to the recent UK Housing Market survey by the Royal Institution of Chartered Surveyors (RICS). In June, financial organisations Halifax and Nationwide Building Society also reported lower house prices, showing an average annual decline of 0.5% and 1.5% respectively.

According to Nationwide, across the last quarter of the year, average house prices continued to fall in Northern Ireland (with the largest decreases seen in the City of Belfast), Scotland and Wales, whilst England remained unchanged. London, in particular, saw the strongest growth in Q2, although the annual growth rate did decline in comparison to Q1. In fact, RICS reported London to be the only region with a positive price balance, and that the South East of England showed the least negative price balance.

UK Rental Market

New research from Experian has revealed that the UK rental market’s growth is ongoing, with the number of properties advertised to rent increasing by 6.34% earlier this year, when compared to the same period in 2011. In contrast, they reported a 2.53% decline in the number of properties for sale. Despite this, the demand for rented property still exceeds supply, which is also causing a steady incline in rental values.

On a regional level, Experian noted clear increases in the number of properties available to let, with the North West and the West Midlands showing increases in excess of 12%. However, there is not a clear North/South divide in the rental market, with the East Midlands, for example, seeing a decrease of 3.57%.

Will the current market patterns continue?

As little fluctuation is expected in the sales market for the remainder of 2012, people will likely still find it difficult to sell their homes, and more properties will be put up for rent because they haven’t sold.

How will this impact your relocation programme?

In the destination location:

Now may be a good time to purchase a home whilst housing prices continue to be historically low
For those looking to rent, keep in mind that the property market is moving fast, especially in London, so they need to take action as quickly as possible whilst still taking the proper steps to control the rent paid and to protect their rights as a tenant. whilst still taking the proper steps to control the rent paid and to protect their rights as a tenant.
Due to the demand of rental property, particularly during the Olympics, expectation setting will be as important as ever, as assignees may get less for their budget as rental values increase
Noting the north/south divide, those relocating between regions in England will also need to be advised of the regional differences, and expectations need to be managed in the housing market, from both a rental and sales perspective.

In the departure location:

If an international assignee or domestic transferee wishes to sell their home when they begin their new assignment, they should place their property on the market at a realistic asking price to generate interest and help achieve the ultimate goal of a sale
Consider a Home Sale marketing strategy to help those relocating find a buyer as quickly as possible, reducing both risk and employer’s cost.

Any questions, please contact sirvaeurope@sirva.com.