Posted on Monday, February 11, 2013
2013 has started in a positive fashion with good levels of committed enquiries for both sales and lettings which, in turn, are becoming agreed transactions.
Demand remains higher than supply in many price ranges and well located and well-presented property is attracting considerable interest and excellent values are being obtained.
With the Bank of England continuing to hold interest rates at 0.5% and signs of a slight easing in the mortgage market, there is cause for optimism for the sales market in the weeks and months ahead.
Several recent reports have shown growing numbers of first time buyers returning to the market and also that property values in the Poynton and Bramhall areas increased slightly overall in 2012.
Martin Ellis, housing economist at Halifax, commented:
"Conditions in the housing market have been largely unchanged over the past 12 months with little overall movement in either house prices or sales for the second consecutive year. This remarkable stability, given the poor domestic and overseas economic climate, has probably been a key driver of the improvement in sentiment regarding the outlook for house prices over the coming year."
There are clearly signs of returning confidence and I fully expect volumes to move forward as the year progresses. The next few months are key ones as many family buyers look to commit to a transaction with a view to moving in the summer and being in a position to get children into their preferred school catchment areas.
The lettings market remains strong with demand exceeding supply and top rental values being obtained. The private lettings market has grown to 17.4% of households and is predicted to still increase slightly over the next couple of years. Many people have become tenants reluctantly, being unable to buy, although the sector has also grown as a “lifestyle choice” for many.
Many tenants, particularly those who are on company relocation assisted moves, are showing a preference for fully managed property and are prepared to pay top rents for the peace of mind of this type of tenancy.
The lettings market moves a little more quickly than sales but the same drivers of activity exist.
A recent report from Templeton LPA showed that severe tenant arrears were at their lowest level for over a year which is clearly positive news and many landlord investors have said that they will be looking to add to their rental portfolios during 2013.
Whilst there may be nothing on the economic horizon to suggest significant improvements in the property market, it is now approaching four years since the financial collapse of Lehman Brothers (which is regarded by many as the nadir of the financial markets)and a little longer in terms of the economic downturn in the UK. The intervening period has, of course, been tough economically for many but the numbers unemployed are slowly reducing and many of those within work have been clearing debt and building savings.
Whilst home ownership is at its lowest level (65.3%) since 1987, there remains a “home owning” culture in the UK and the “pent up” demand will, at some point, need to be realised. The lack of new home building and a growing population has helped stop values falling significantly and, my view is that 2013 may well be looked back on in the future as having been a great time to have moved and bought.
Naturally, at Richard Lowth & Co we shall be pleased, in complete confidence, to discuss your personal requirements and the team and myself look forward to talking with you.
Richard Lowth MNAEA