Market Comment – July 2017

Perceptions-v-reality in property can confuse even the best-informed of armchair economists. The latest House Price Sentiment Index from Knight Frank and HIS Markit suggests that approximately twice as many households believe their property value has risen, rather than fallen, in the past year, yet the measure of sentiment is still nearly 15% lower than its previous peak in May 2014.

Despite this positive outlook, according to HouseSimple research, some 35% of all properties currently being advertised for sale in London (and up to 45% in some boroughs) have been reduced in price – an 18% increase in the number of reductions since February. And what happens in London often ripples out across the rest of the UK thereafter. Having said that, Oakfield Estate Agents have continued to achieve some record prices in recent sales we have agreed and have not noticed any drop in the healthy activity levels that keep the market bubbling here.
Indeed, the latest survey of NAEA members reports a 16% increase in sales over the same time last year, although only 2% went for over the asking price.

Nationally, house prices themselves, according to HM Land Registry, are showing a respectable annual price increase of 4.7% with a 0.5% increase last month alone. The introduction of a punitive Stamp Duty Land Tax regime for more expensive homes, especially for second home buyers, has hit some buyers in the pocket, with an SDLT bill of up to 15% of the purchase price, although most people do not fall into this bracket fortunately. (Incidentally, the maximum Stamp Duty payable in 1993 was just 1%).

It is a relief to see that any local fall-out following the Brexit referendum has now levelled off and we are enjoying a reasonable supply of new instructions coupled with level demand.

So whether you are buying or selling, there are equal and opposite forces in play, neither of which should be regarded as compelling enough to delay a move. As ever, if your life would be enhanced by moving – then move! Life’s too short!

Neil Newstead, FARLA MNAEA MIRPM
Chief Executive Officer

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