What a great start to the year! No snow and masses of confidence in what appears to be an early spring market. All the talk of an early rise in interest rates at the tail end of last year have been kicked into touch and a rise anytime during 2016 now looks very unlikely. Indeed, house price growth has hit a 17-month high, primarily due to a severe shortage of apparently available stock, which is at the lowest for over 11 years.
However prime central London continues to fall from its perch with properties in its most expensive borough, Kensington and Chelsea, falling over 14% (according to the Daily Mail!) but then others report a 24% year on year rise in new buyer registrations and most areas elsewhere in the UK are reporting strong trading. The Halifax reports annual house price growth for last year to January at 9.7% making the average house worth £212,430, although HM Land Registry puts this figure at £188,270 – a 6.4% annual increase and up 1.2% on the previous month. But irrespective of the actual figures the main thing here is the trend – which continues to be gently upward.
However, affordability is increasingly becoming an issue with the average house price now representing 5.3 times average annual earnings (7.9 time earning in London) and this is possibly more likely to dampen buyers’ ardour than any threat of an interest rate rise. Having said that, Rightmove has just reported that it received 127 million visits last month – a 20% increase in visits over the same time last year!
Whilst this may well be a good indicator of short-term buyer intention, it does little to encourage potential sellers that they will find a property once they have sold their own. Our advice to these buyers is “fear not” – there are many more properties available “off-market” than the media and property portals would have you believe. Indeed, if you’re thinking of selling, then the “off-market” approach could also pay dividends- without making your property publicly available yet retaining access to the hottest buyers who really appreciate the inside track on the latest properties.
As ever, please feel free to contact us as soon as you get that feeling that there is a move in the air! We’d love to help.
Neil Newstead, FARLA MNAEA
CEO – Oakfield Estate Agents