Posted on Sunday, June 12, 2011
Richard Lowth MNAEA MARLA
Last month in my article entitled location, location, location I talked about the confusion being caused in the property market by the conflicting data and reports being produced by lenders such as the Halifax and Nationwide and other house price indices that regularly get quoted in the media.
My point was, and is, that the UK property market is actually made up of many local and regional markets which do not all operate in the same way at the same time.
Interestingly, since my aforementioned comments, well known and highly respected mortgage commentator Ray Boulger has outspokenly condemned house price indices and transactional volume reports based on the fact that many are “seasonally adjusted” and that therefore the information contained within them at any point in time is not worth reading.
The Government is currently undertaking a review of these indices and reports and I look forward to seeing the outcome and any changes that may be introduced.
In the meantime, as Spring moves into Summer and the evenings get longer, the property market locally remains quite buoyant, partly due to a shortage of instructions for sale and to let.
All markets are built on the simple economic laws of supply and demand and whilst the overall economic picture remains challenging and is causing many to “sit on their hands” and wait, those that do wish to move are finding that values have held up well.
At the June meeting of the Bank of England monetary committee, the base rate was held at 0.5% for the 28th consecutive month and whist fears of inflation have not gone away, the general feeling is that interest rates are unlikely to rise in a hurry.
The Government has also announced plans to sell off large areas of public land for house-building. It is estimated that we need to build around 250,000 new homes a year to keep pace with a growing and ageing population. This is nearly 150,000 more than we are currently achieving and so any increase in these numbers is to be welcomed in order to assist with first time buyers, job mobility etc.
Interestingly I watched a programme on the BBC recently in which Andrew Marr analysed some of the world’s “mega” cities. Shanghai in China is currently seeing around 100,000 new homes being built . . . every month! Roughly the same as in the whole of the UK for a year!
My views are that the Summer months will see a steady if unspectacular market for both sales and lettings. There are not as many buyers around as there where a while back but those that are looking are serious about moving and sensibly priced properties continue to attract a lot of interest. There remains good interest in well priced properties within all areas but particular interexst at the moment in property within well regarded school catchment areas as people look to achieve a move before September.
Demand for rental property continues to outstrip supply and rental values have been increasing as a result. However a recent survey of landlords undertaken by Estate Agency Events found that 65% of landlords would rather keep a tenant than change tenants for an increase in rent. A sure sign that the old maxim of “a bird in the hand being worth two in the bush” applies and security and quality of tenure are more important than pure pound notes.
The same survey revealed that 52% of landlords were "accidental" or "reluctant" in that they hadn't intended to become landlords but difficulties in mortgaging or in selling and buying, had forced them to do so. This is another indicator of a significant pent up demand and why building more homes is a critical factro in the future success of the UK economy.
Naturally, like the housing market, every property and every individual’s circumstances are different and at Richard Lowth we ensure that we deliver a bespoke and personal solution to every situation. If you are thinking of selling or letting, buying or renting, please call us today. We are here to help.
