February
There has been a pronounced upswing in UK property prices according to Rightmoves February house prices index report. This is not a clear indicator that house prices are going to continue to rise but appears to be as a direct result of there being a much lower than expected number of people bringing their house to the market in January. This can of course be, to some extent put down to the significant cold spell that we have been experiencing although there is some good news. Rightmove indicated that the January search activity was a record month for them up 29% on the same period last year.
Miles Shipside, Commercial Director of Rightmove commented "a price jump of over 3% is more comparable to the pre credit crunch boom time. Sellers are setting their sights higher, and some Agents are going along with them in order to win scarce instructions. Property for sale remains scarce in popular areas, but new supply to the market has to be priced at what buyers are willing and able to pay. An average increase of over £7,000 may prove to be a bit too spicy for some buyers tastes, now that economic constraints have forced them to develop a simpler palat."
Where supply remains well below historic levels, which is especially noticeable in parts of the south, upward price pressures look sustainable. Sellers whose research indicates that there are few properties like theirs on the local market have spring pricing opportunities. Where property supply gets closer to pre crunch levels, sellers should price more aggressively having critically compared their property to recent actual sales as well as to what is currently on the market.
Average national asking prices are now 6.1% (£13,300) higher than a year ago.
It is clearly the case that sellers are starting to appear in greater numbers, but they must realise that this market is more akin to the mortgage ration times of the 1970's - 1980's than the more recent times of relatively easy mortgage availability. However, if sellers return to the market in larger numbers the current upward price pressure would not be sustainable because there would then be a limited number of buyers.
Highlights of the Report
Rightmoves February house prices index reports contained some interesting information on the market. There are clearly more buyers out there than there are sellers and this is having an effect on house prices. There is always the risk that there are Estate Agents out there who are desperate for instructions and as a result they will fight to win that instruction by overpricing. It is surprising to see that the West Midlands had the highest increase in the whole of the UK at a staggering 8%. This cannot be sustained. As we have previously confirmed the gap between what the vendor expects to receive and what the purchaser expects to pay will continue to get wider if house prices continue to rise. Sensible pricing is still extremely important and Estate Agents should be making sure that their valuations are not unachievable and irresponsible.
The highlights of the report are:
1. Scarce new sellers bump up asking prices by 3.2%, an average increase of £7.137 with London setting a new record of £427,987.
2. Monthly rise reminiscent of boom times, there has been no higher rise since April 2007 when we saw a 3.7% increase.
3. January sees record search activity on Rightmove.co.uk up 29% on the same period last year.
4. The Economic Fundamentals cannot support further price increases of this magnitude.
All areas of the UK saw an increase in house prices except the South West, North West, and North.
West Midlands & Staffordshire Housing Market East Midlands & Nottinghamshire Housing Market
April
There has been a pronounced upswing in UK property prices according to Rightmove’s April House Price Index Report. This is the third month in a row that prices have increased representing more than just a seasonal bounce. Continuing with the good news, sellers are returning to the market with 22,000 new homes for sale this month, an increase of 13% on March.
Rightmove Comments
Rightmove is the UK largest property portal and accounts for over 28 million visits each month. It is now an accepted fact that most people commence their search for a home on the internet. We invest heavily on behalf of our clients in www.rightmove.co.uk.
Miles Shipside, commercial director of Rightmove comments: “My view is that many sellers are still starting too high, but the fact that they are coming to market in greater numbers and feel they can ask more shows a strengthening in resolve and confidence, which is an encouraging sign. It looks like we are now bumping along the bottom of the trough”
A fall in time-on-market is further evidence of the spring bounce in sales activity reported by many agents.
Highlights of Report
Rightmove’s April House Price Index Report contains a number of highlights that demonstrate a optimistic trend in the market. Caution should however be expressed regarding the rise of house prices and whether the gap between what the Vendor needs and what the market/Purchaser is willing or able to pay is still too great. Sensible pricing is still extremely important. The highlights of the report are:
- Asking prices rose by £3,996 or 1.8% which is the largest monthly increase for 14 months.
- This is the third consecutive monthly increase making this more than just a seasonal bounce with 80,000 reducing the asking price by 2% or more each month.
- There are 22,000 new sellers entering the market each week up 13% on March.
All regions of the UK saw a price increase in April with the exception of Greater London which recorded a drop of 3.2% on the month against an annual decrease of 4.1%.
West Midlands & Staffordshire Housing Market East Midlands & Nottinghamshire Housing Market
May
This month sees a jump in new sellers' average asking prices more reminiscent of a boom market. This is the largest May rise Rightmove has measured since 2003, when property was seeing annual rises in excess of 15%. However, sellers may be pricing at this level because they fear that their equity could be eroded to danger levels where they can't find an affordable mortgage deal on their new purchase due to lenders' stricter loan-to-value ratios.
Miles Shipside, commercial director at Rightmove comments: "While buyer sentiment is improving, with email enquiries to agents via Rightmove so far in 2009 running at 109% ahead of last year, the number who can proceed has been savaged by the mortgage famine. Pricing below your local competition, if you can, is vital in order to achieve a sale. With deals being done at prices 25% below the peak of the 2007 boom, it's not surprising it's taking some sellers a long time and some hefty price slashes to adjust to the new 2009 price floor."
The improvement in buyer sentiment is also evidenced by the recent Rightmove Consumer Confidence Survey, which canvassed the views of over 22,000 potential home movers*. The outlook for house prices has turned positive with six in ten potential home movers now expecting prices to remain the same or increase over the next twelve months. Just three months ago, 69% of respondents were expecting prices to fall further over the next twelve months. This has now turned around dramatically to only 35%.
Shipside comments: "At present it looks like the market is bumping along the bottom in terms of transactions, with limited supply preventing further price falls. This is a welcome element of stability though being on one's knees, whilst stable, is not a desirable position for any length of time."
Highlights of the Report:
New sellers push up asking prices by 2.4%, driven by a mixture of ambition, optimism and necessityLow level of property coming to market in May as falling values erode sellers' critical loan-to-value ratios.
Prospective buyers with nothing to sell are increasingly active, encouraged by 59,072 propertiesReducing asking prices by 2% or more in the last 4 weeks, with an average reduction of 6.8%.