What a year it’s been! The words Brexit and Trump have caused division and confusion on a global scale and the political landscape as we enter 2017 is very different to the one we are used to.
Despite these surprises, the UK property market has remained remarkably robust, although it may be too early to tell. It’s true that rumours and uncertainty play a huge part in the confidence levels that drive the market. But maybe we have moved away from it actually being regarded as a “market”. Unlike a stock market share, a property is primarily a home and, as the population on our small island explodes, demand for homes is higher than it has ever been. However, supply is still way too low following years of new-build stagnation. Hence prices continue to rise, albeit more modestly than in previous years.
Certainly the heat is off the London market more than any other area (Prime Central London is down by 24% on last year in terms of transaction volumes), pointing to a long overdue balancing of the regions. Or could it point to a more general slowdown in house prices? 2017 may well see higher inflation and a probable rise in interest rates. If, additionally, employment figures were to take a dip, or industrial action takes a hold, then you have a cocktail for falling demand, which would certainly put a dampener on house prices, which have overall ended the year 6.9% up on last year’s figures with the average UK house price now standing at £216,674 (2015 was 4.5% up) (Source Land Registry). Rightmove reports that although demand is 9% up on last year, and sales agreed in all areas except London are up by an average of 5.2% on last year, it is still forecasting a rise of just 2% during 2017.
Any potential difficulties could come at a time of year traditionally associated with an increase, not a decrease in activity – the spring. Our advice, this year more than ever before, would be to hit the market before the traditional rush. There are plenty of buyers for the time being, but a dearth of stock, meaning you could not only get top dollar, but in selling during the winter, you’ll then be in pole position as a buyer yourself, with plenty of choice by the time spring comes along. It’s called strategic home-moving! In the meantime, may we wish all our customers a very happy Christmas and a prosperous New Year.
Neil Newstead, FARLA MNAEA
CEO – Oakfield Estate Agents