Fireworks in November?

Fireworks in November?

According to Rightmove, asking prices bounced back from a fall of 1.2% in September to a rise of 1.1% in October. It’s the biggest October rise for three years, but those figures mask some very varied market conditions across the different regions and sectors.

Digging below the surface, it is clear we are moving towards a buyers’ rather than a sellers’ market – the number of sellers is up by 3.1% compared to last year, whereas the number of transactions is down by 5.9%. Second stepper homes are still selling well, but it’s larger, 4 and 5 bedroom family homes that are struggling, taking 76 days to sell against an average of 63 days.

Miles Shipside Rightmove director and housing market analyst comments:

“Whilst affordability is stretched, it is still countered by the motivation to own a home rather than rent, or the need for extra space to house a growing family. Sellers looking to find a buyer before Christmas have a head start if they are selling a property in these two mass-market sectors, as that is where there is the greatest demand.
However, with buyers’ average wage rises often falling behind retail price inflation, and with a rise in interest rates being more heavily trailed by the Bank of England, sellers in these most popular sectors should still be wary of over-pricing. Buyers will be looking for the best buy on the market in their desired area either in terms of price or quality of finish.”

There are also some wide geographic variations – in Prime Central London transaction volumes were down by 9% in October and by 7.9% in the South, but by just 3% in the North. And, over the last 12 months, prices slipped by 2.5% in London, but were up by 4.7% in the Midlands.

It’s taken a while, but there is no doubt that the current political uncertainty in the aftermath of #Brexit and the snap election is taking a toll on confidence levels.

Halifax’s house price optimism index was down by 14 points over the last 6 months, with 1 in 5 now believing prices will fall over the next year, although, of course, 4 out of 5 do not. Interestingly, the report also found that only a third of those surveyed were worried about the impending rate rise.

Russell Galley, managing director of Halifax Community Bank says,

“Even with a potential base rate increase on the horizon it’s significant that buyers’ concerns continue to be centred on raising deposits and job security and, as such, we do not anticipate that an increase in the base rate will have a significant effect on the demand for properties.”

Until there is a clearer picture of what kind of #Brexit there will be, buyers are likely to remain cautious.

The property world is, however, waiting with interest to see what Philip Hammond has to say in his upcoming Autumn Budget Statement.

There has been widespread speculation he may try to help first time buyers by, for example, reducing their Stamp Duty, which could also have a stimulatory effect on the rest of the market.

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