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I talk to a lot of local estate agents in Camberley, Blackwater, Farnborough, Aldershot, you know all the local big towns, on a fairly regular basis.
One thing they all tell me is that house prices are up. Not to the levels they were 2 or 2.5 years ago, but thing are beginning to look up despite there not being enough houses on the market actually for sale.
This has been confirmed by the latest RightMove press release stating 3.2% rise in house prices nationally.
I thought I would print the article here:
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Monthly rise of 3.2% has not been beaten since April 2007, reveals the latest Rightmove House Price Index
The stock-starved housing market saw a welcome increase in the number of properties coming to market during the month, with over 90,000 new listings on Rightmove. Sellers appear to be hoping for a prosperous new year, and are asking an average of 3.2% more than last month.
This average rise of over £7,000 is surprising given the difficult UK and global economic picture. However property in popular locations remains in short supply, supporting upwards price pressure, as seen in London where the average asking price this month is the highest we have ever recorded.
Miles Shipside, commercial director of Rightmove comments:
“A price jump of over 3% is more comparable to the pre-credit-crunch boom-times. Sellers are setting their sights higher, and some agents are going along with them in order to win scarce instructions.
“Property for sale remains scarce in popular areas, but new supply to the market has to be priced at what buyers are willing and able to pay. An average increase of over £7,000 may prove to be a bit too spicy for some buyers’ tastes, now that economic constraints have forced them to develop a simpler palate.”
Supply of new sellers continues upward trend
The number of properties coming to market is up by 19.8% on the same period in 2009. It should be noted that the amount of new stock in January 2009 was constrained by the introduction of the ban on marketing a property until its Home Information Pack had been prepared, and this has exaggerated this month’s increase.
New property listings are still down around 37% on the average numbers of properties coming to market recorded in the same period from 2005 to 2008. Average stock for sale per estate agent branch remains static at 63, with property in the more popular locations still in short supply.
East Anglia and the South East show least recovery in new supply, still 45% and 43% down respectively on average levels seen at this time of year between 2005 and 2008. Conversely, the North region shows supply recovery to within 6% of 2005-08 levels.
Shipside comments:
“Where supply remains well below historic levels, which is especially noticeable in parts of the south, upwards price pressure looks sustainable. Sellers whose research indicates there are few properties like theirs on the local market have a spring window of opportunity.
“Where property supply is closer to pre-crunch levels, sellers should price more aggressively having critically compared their property to recent actual sales as well as to what’s currently on the market.”
January search activity sets new records
Rightmove site traffic is a good barometer of prospective buyer intent, with January proving to be a record month. Pages viewed were up 29% on January 2009, at 710 million. Mondays are the busiest days, with the post weekend period being the most popular time to search for what is available, including new listings and price reductions.
For the first time, the number of visitors to our site passed the one million threshold in a single day on the 25th of January, and seventeen days in the month exceeded the previous record day from August of last year.
January is the traditional time for bargain hunters to start shopping around, though with prices recovering there will be fewer bargains to be had this year, and agents and sellers may have to work harder to put a deal together.
Shipside observes:
“The record site activity ties in with the findings of the Q1 Rightmove Consumer Confidence Survey, where 62% of the 32,000 surveyed stated they believe it is a good time to buy. However, many of those searching are likely to have a degree of nervousness about the economic outlook, with only 11.1% of those surveyed believing that the country’s current economic conditions are favourable.
“With finance still tight, properties will have to be beautifully presented and keenly priced in order to convert this high level of buyer interest into firmer commitment.”
Can financial fundamentals support this rate of increase?
Average national asking prices are now 6.1% (£13,300) higher than a year ago. We forecast that new property coming to the market will continue to be at higher prices in the first half of 2010, though sellers must be aware of the paradigm shift that has occurred in the residential mortgage-backed securities market.
Before the deregulation of the late 1980s, lenders relied upon savers’ deposits to fund a more restricted mortgage market. This deregulation was then followed by ten years or more of competitively driven innovation to create a seemingly virtuous circle of mortgage supply and demand.
The circle has been broken by the banking crisis. A return to the peak levels of sales and mortgage transactions will have to await a return to previous wholesale funding methods, or a new variant, as the gap is too large to be filled by retail deposits when the Bank of England winds down its support for the mortgage market.
Shipside comments:
“Sellers are starting to appear in greater numbers, but they must realise this market is more akin to the mortgage-rationed times of the 1970s and 1980s than to more recent times of relatively easy mortgage availability.
“For individual sellers it’s hard to grasp the bigger picture and they rightly hope they will find a buyer who can get the required share of the rationed finance that is available. This works after a fashion while the number of sellers remains limited. However if sellers return to the market in larger numbers the current upwards price pressure will not be sustainable with the restricted number of buyers.”
Hope you find this useful.
If I can help you in any way please do not hesitate to give me a call.
Michael
email; michael@mumsltd.co.uk