The first set of data for 2018 comes, as usual, from Rightmove and they report the housing market has got off to a brisker start than many had anticipated.
Their stats show asking prices were up by 0.7% in January, against a 0.6% rise in January of last year. The annual rate of growth also crept up from 1.0% in December to 1.1% last month.
Miles Shipside, Rightmove director, says,
“Considering some of the gales that buffeted the market in the latter part of 2017, these early readings for 2018 show that there is currently a good following wind of search activity.”
However, he goes on to point out that all regions are currently showing lower transaction volumes than a year ago and that; as a result, the market is becoming more price sensitive. The total number of sales agreed was down 5.5% during the last quarter of 2017 when compared to the same period in 2016.
“Setting tempting asking prices and then quickly reducing them if there is little initial interest will be key to turning this promising level of buyer activity into actual sales, especially in the less active sectors and locations of the UK.”
There is no doubt; prices are being kept stable by a long-term shortage of stock. Nationwide’s economist, Robert Gardener describes the flow of new housing to the market as ‘a trickle rather than a torrent,’ and Rightmove reports 40% of property on agents’ books is already under offer.
In the capital, conditions are a bit more challenging – asking prices have dropped 1.4% since last month and by 3.5% annually. Although, as London is made up thousands of micromarkets, those figures hide some quite wide variation. There are signs the market may have bottomed out in Prime Central London, where annual prices rose by 0.1%. Whereas, they fell by 6.2% in zone 2 areas and by 7.7% in zone 3. In contrast, asking prices rose in zone 4 (+0.8%) and zone 6 (+2.3%).
There’s more positive news from the first time buyer sector. There was a great deal of speculation pre-Christmas as to whether cuts in Stamp Duty for first time buyers would boost activity in the New Year, or simply push up prices.
The National Association of Estate Agents (NEAE) has just provided the first indication of its true effect – although the number of registered house hunters fell by 20% in December, sales to first time buyers rose by an impressive 32%.