Analysing and understanding the UK property market is notoriously difficult. Conflicting reports and biased perspectives often confuse people who simply want a degree of reassurance that their purchase or sale is well-timed. Many people who currently have no intention of moving are also naturally curious about the value of their home, which is usually their biggest investment.
There are two aspects of the property market that interest us most – property values, driven by the relative balance of supply and demand, and transaction volumes, which are primarily influenced by confidence levels and affordability.
The past year has been relatively unstable: we saw a massive rush to purchase buy-to-let investment properties before a change to the SDLT tax regime in March 2016. We then had the Brexit referendum, a change in Prime Minister, an American election and continuing sporadic terrorist activity. Yet through all this, the property market has remained strong in terms of prices, primarily due to lower supply levels as people “wait and see what’s going to happen”. And what usually “happens” is “not much”! Life goes on following anything other than a major crisis. And there have been no major crises in the property market for years.
The market is certainly gaining a long-awaited fluidity, with transaction volumes having risen about 21% compared to February. Any comparison with the same time last year would, of course, be distorted by last year’s SDLT deadline. However, the pace of house price growth continues to soften; while The Land Registry puts annual price growth at 5.8% there will always be a time lag in this behind asking prices. Rightmove currently reports annual asking prices up 2.3% compared with 7.6% this time last year, so we expect reported Land Registry figures to reflect this damping in the coming months.
And what of the election? The consensus is that this election is unlikely to have any major effects on the property market. Any potentially scary stuff has already happened in the past twelve months and whatever the outcome of the election there is unlikely to be any fallout that would have any significant bearing on whether people will choose to buy or sell their home. There are fewer speculative sales than ever before, with most transactions stimulated by a genuine need to move, prompted by the real stuff of life – a job change, marriage, a growing or shrinking family, debt, divorce, etc. The election is unlikely to affect any of these, and it is also fortunate that polling day, on 8th June, will follow a very short campaign. As ever, we British keep calm and carry on.
Having monitored other agents (as obviously we always do), some appear to be overvaluing, either through lack of stock, perhaps a change of personnel, or in fairness through vendor instruction. Managing vendor expectation can be tricky in a market where “sold in a week” is no longer the norm; however, it’s certainly still buoyant and offers are being accepted on a weekly basis.
There’s not too much to report on the local lettings market; it’s pretty much a (continued) case of “price it right and you’ll secure a tenant”. We have certainly seen an increase in tenant registrations this month, albeit also an increase in the number of one and two bedroom properties hitting the internet, with the availability of houses to rent remaining consistent with the figures of March.