Depth report

　　

According to a survey by the Royal Institution of Surveyors, the average price of a British house in May was 220,000 pounds, an increase of only 0.4% compared to April, and the growth rate was the lowest since August 2016. Compared with the same period last year, the growth rate of UK house prices in May was 2.1%, which was not only a sharp drop from 2.6% in April, but also the lowest level in 4 years.

 　 House price fluctuations are most pronounced in the London area. The latest monthly growth rate of house prices in London is only 0.1%. Although housing prices in Kensington, Chelsea, Westminster and other core areas have begun to rebound, housing prices in other areas have fallen significantly. The overall house price is maintained at around £615,000 per set.

 　 Market transactions closely related to prices are also not optimistic. The survey shows that most real estate brokers believe that the volume of residential real estate transactions in the United Kingdom in May continued the decline in April, and more and more homeowners began to stop selling their homes because of falling prices. Recent data from the Bank of England show that in the past six months, the number of new housing loans per month ranged from 64,000 to 68,000, and the data in May was the lowest level in seven months.

 　 The weakness of the housing market is also reflected in the rental housing market. Data show that the average rent in the UK in May fell by 0.3% compared to the same period last year to 901 pounds per set, the first drop in the past eight years. Among them, the London area has the most significant decline. The rent of new rental houses has dropped by 3% compared with the same period last year to 1502 pounds per unit; the rent prices in the northeast, southeast of England, York and Scotland have fallen by 0.6% to 2.3 %between. This development trend is in sharp contrast with the hot scene of an annual rent growth rate of 4.7% in the middle of last year.

 　 It is worth noting that a large-scale oversupply situation has begun to appear in the rental market. Statistics show that in March this year, the average number of rentable houses owned by a single branch of a major real estate broker was 183, an increase of 14 compared to the same period last year.

 　 There are many reasons for the recent weakness in the UK residential real estate market, the most important of which is the decline in residents' spending power. Most real estate brokers believe that whether it is the annual increase in housing sales prices of more than 2% or the increase in rents that have reached more than 4%, they far exceed the increase in wages of British residents. Taking into account the recent rapid rise in domestic inflation in the UK, the actual disposable income of residents has been declining, which has directly contributed to the weakness of the real estate market. Increased political uncertainties are listed as the second leading cause of the recent downturn in the residential real estate market. The survey shows that before the British election, most families and developers have postponed the construction of related houses, taking into account the uncertainty of the election. How long the British minority government can support in the near future has also aroused concerns and concerns from all parties. The demand for related housing construction has not improved significantly, and the number of newly built houses has fallen sharply.

 　 Although the current residential real estate market has begun to show signs of weakness, it is unlikely that the market will collapse. Most real estate brokers believe that the overall macroeconomic environment of residential real estate remains sound. Among them, the economic growth foundation is stable, the employment rate is continuously increasing, and the housing mortgage loan interest rate is still at a historically low level. At the same time, the current number of newly built houses and the number of stock houses sold is declining, which will form a fundamental support for market prices from the supply side in the next few months.

 　 Regarding future trends, the Royal Institute of Surveyors believes that with the stability of the UK political situation and the clear prospect of Brexit in the future, the price of the UK real estate market will once again usher in rapid growth. It is expected that the growth rate of house prices in 2017 will reach 2%, and real estate sales will usher in a new peak in 2018. From a long-term perspective, the market is optimistic about the UK housing market after Brexit, and believes that the average annual price increase in the next five years will reach 3.5%.