The number of properties sold on the Isle of Wight this year has fallen, as political uncertainty puts off potential buyers, says a chief economist.
The Royal Institution of Chartered Surveyors said that constraints on affordability have also affected buyers, following significant rises in the cost of properties in recent years.
Eleven per cent drop
Up to the end of July, the most recent month for which data is available, 1,497 properties had been sold on the Isle of Wight.
It is an 11% drop compared to the same seven months in 2017, a picture reflected across the South East, where sales were 12% down.
National picture
Across the UK, sales were lower in each month to July than in the corresponding 2017 month, and were down by 9% in total.
Simon Rubinsohn, chief economist at RICS, said:
“Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations has become an increasing drag on transaction activity in the housing market.
“The mood music amongst buyers has also been impacted by affordability constraints as hefty price gains over recent years have pushed ever higher the size of required deposits.”
New builds
The Government has encouraged the building of new homes to help deal with the housing supply, with an aim of developing 300,000 new properties a year nationwide.
It has also encouraged first-time buyers to purchase new builds. It’s Help to Buy scheme offers favourable saving rates for first-time purchasers, and equity loans or shared ownership schemes at the time of purchase.
But between January and July, just 48 new homes were sold on the Isle of Wight, 41% fewer than in the same period last year.
Second-hand property sales also decreased by 10% to 1,449.
Second-hand segment even more exposed
Mr Rubinsohn said:
“The Government’s Help to Buy scheme has provided some support for the new build sector, but this has left the second-hand segment even more exposed.
“On top of this, a lack of stock for the sale in this part of this market has compounded the problem. Existing home-owners are staying put for longer meaning there is less property available for prospective purchasers to view.
“Meanwhile, in the background is the concern that the cost of mortgage finance is likely in due course to become dearer.”
Prices increase
As reported last week, while sales volumes have dropped, house prices on the Isle of Wight have increased. The average property sold for £215,048 in September, 4% more than a year previously.
First time buyers paid an average of £174,641.
Article shared by Data Reporter as part of OnTheWight’s collaboration with Press Association and Urbs Media
