Henley Property Blog – Spring Market Report
With reports today that possibly one third of Millennials might never own their own home, we take a look at how the housing market is faring so far in 2018. A recent report from RICS cast some gloom over the housing market with records showing that buyer demand fell in March for the 12th consecutive month. In addition, surveyors are reporting that March was also the 7th month to see a fall in the number of houses coming to market.
These factors have led to estate agents stock levels reaching an almost all-time low and in the South East, East Anglia and North East house prices are falling.
Rightmove’s house price index paints a slightly rosier picture with reports of a modest price rise in the national average for new to market property of 0.4%. This pushes the national average house price to a new high of £304,943, with 6 out of 11 regions hitting new peaks. Sadly, the South East is not one of those regions.
Strangely, Rightmove reported one of their strongest months in March with more site visits than ever, suggesting that there is still strong interest in property, but on closer examination one can see that different regions are operating at different speeds. Similarly, different properties are also achieving different results. Typical first-time buyer properties with 1 or 2 bedrooms are on average up 2.2% on last year whereas at the higher end of the market, a typical detached house with 4 or more bedrooms has an average price increase of just 0.9% and lags behind its peak of October 2017.
Miles Shipside, Director of Rightmove and housing market analyst states “Home buyers are seeing average asking prices at their highest ever level with upwards price pressure getting stronger the further away you move from London. However, high prices stretch buyers’ willingness to pay or ability to afford them.”
Rightmove have also looked closely at the selling price currently being achieved by successful vendors and this too varies from region to region. The national average of achieved selling price is currently 96.7% of the final asking price, equating to £10,000 on the current national average asking price and much higher in regions like the South East. Here, the average asking price is £408,544 leading to £12,553 difference. In London for example, successful vendors were achieving 98.9% of their final asking price back in 2014, today that has fallen to 95.6%.
Shipside comments “This big jump in the gap between final asking price and sold price really highlights the shift in extremes from the sellers’ market in 2014 to a buyers’ market in 2018”.
So, what does this all mean for those vendors still hopeful of achieving a sale in Spring 2018? Ben Appella, Partner in Residential Sales at Simmons and Sons states “It is becoming clear that price will be key in the coming weeks and months. Whilst we are seeing good numbers of property coming to market in Marlow and Henley on Thames, buyer enquiries are not at the level we would expect at this time of year. Buyers are becoming increasingly price sensitive and are only showing interest in those properties that are competitively priced.
We do see a positive side to this story however. For buyers, mortgage deals are quite attractive currently with some good fixed deals on offer and fiscally it makes more sense to buy when prices are levelling out than it does in a market where prices are at their peak. For vendors, if they are willing to be realistic they can take advantage of this and attract a buyer with a competitive asking price.”
Sources : Rightmove Price Index Report April 2018
RICS Property report March 2018