Has Boris brought us some property bounce?

14/02/2020
Has Boris brought us some property bounce?

It’s at this time we get our first look at the New Year’s data and see whether all those pundits’ predictions are on track, or not. There have been some big claims made about 2020 – will there really be a ‘Boris Bounce’? And are we going to see all that pent-up demand finally released onto the market?

The first sets of monthly data usually come from Nationwide and Rightmove. Nationwide’s figures are compiled using completed transaction data – i.e. mortgage payouts, whereas Right moves are based on asking prices, including those just coming onto the market. As a result, Right move’s figures are more up to the minute. That’s particularly important this month, because the election came in mid-December (12th) and only afterwards was there the kind of certainty the housing market was craving. As a result, they make for some very different reading.

Nationwide’s index saw modest growth in January, with monthly prices up by 0.5% and annual growth rising from 1.4% to 1.9%. They note that this is an improvement on the previous 12 months when growth was consistently under 1%. What’s perhaps more significant is that many of those transactions would have started some time before the election, as the average sale takes around 3 months to complete.

This becomes even more apparent when you look at Right move’s data. The 2.3% monthly rise in asking prices, in contrast, is the biggest they have ever recorded at this time of year. Enquiries were up, too, by 15% and agreed sales up by 7.4%. Supply levels, which have been problematic in recent years, also received a New Year boost, with 65,000 new properties being listed between mid-December and January 15th – another record.

According to Miles Shipside, Rightmove director and housing market analyst:

”Whilst a substantial rise is the norm in January, buoyed by the start of a new year, this is the biggest new-year price surge that we have ever recorded. ”However, it is still a price-sensitive market, with stretched buyer affordability, so sellers should be careful not to get carried away with their pricing and miss out on this window of increased activity.

One factor behind the upwards price pressure has been the shortage of property coming to market in many areas of the country, with some would-be sellers postponing their moves until they judge the outlook to be more certain. While there may well be more twists and turns to come in the Brexit saga, there is now an opportunity for sellers to get their property on the market for a spring move unaffected by Brexit deadlines.”

And, for once, that good news includes London. In yet another record, the capital’s prices were up 2.1% last month, the largest ever January rise. At the same time, there was a 19% leap in the number of agreed sales.

There is, however, still a note of caution – after so many years of uncertainty, there was bound to be some sort of bounce.

What we don’t know, is how much if any that bounce will be affected by any setbacks in our trade negotiations with the EU.

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