Spring Market Update

You may have seen reports in the press about the current strength of the housing market, but what is really going on?

According to Nationwide, asking prices have been rising at unprecedented levels and demand is outstripping supply. In April, they saw their biggest monthly rise in 17 years, up by 2.1% and, annually, prices were up by an impressive 7.1%. Rightmove’s data revealed an identical 2.1% rise, which is only the second time in the last five years that prices have gone up by more than 2% in a single month. At the same time, sales volumes grew by an eye-watering 55% when compared to 2019 and average selling times were at their lowest ever levels (45 days). Traffic on Rightmove also hit record levels - with over two billion minutes spent on their website.

Tim Bannister, Rightmove’s Director of Property Data comments:

“Almost one in four (23%) properties that had a sale agreed in March had been on the market for less than a week, which is also the highest rate that we’ve ever recorded. If you’re looking to buy in the current frenetic market then you need to be on your toes and ready to move more quickly than ever before.”

These unprecedented levels of activity are leading some to question whether the market might be overheating and whether it might come back to earth with a bump once the stamp duty holiday is over. Research carried out by Nationwide suggests otherwise. They found that, although the stamp duty holiday was having an impact on the timing of housing transactions, it wasn’t the key motivating factor. Three-quarters of the homeowners who were either moving home or considering a move said they would have done so even if the holiday period had not been extended. Even before the pandemic, considerable pent-up demand had been building on the back of Brexit and previous electoral uncertainty. This has added considerably to the current levels of activity and it could be a while before such a substantial backlog in demand can be sated.

Robert Gardner, Nationwide's Chief Economist, said:

“With the stock of homes on the market relatively constrained, there is scope for annual house price growth to accelerate further in the coming months, especially given the low base for comparison in early summer last year. Indeed, if house prices remain flat in month-on-month terms over the next two months, the annual rate of growth will reach double digits in June.”

Rightmove notes that the vast majority of recent sales are for 2-3 bedroom houses which don’t tend to benefit from the maximum stamp duty reductions. Even so, both Rightmove and Nationwide agree that some of the heat should come off the market by summer and that the long-term outlook is dependent on how well the economy recovers from the pandemic.

In London, where the pandemic has had a more negative impact on house prices, the market is now showing real signs of recovery. In April, asking prices were up in 30 out of London’s 32 boroughs. That included many of the more central areas, such as Westminster (up 1.8%) and Kensington & Chelsea (up 0.7%). The biggest riser of all, though, was Richmond at 4.2% (source: Rightmove).

HOUSE PRICES AND STATISTICS

All the indices are now starting to reflect the current boom conditions, in both their monthly and their annual figures.

Nationwide: Apr: Avge. price £238,831. Monthly change +2.1%. Annual change +7.1%
Halifax: Mar. Avge. price £254,606. Monthly change +1.1%. Annual change +6.5%
Land Registry: Feb: Avge. price £250,341. Monthly change 0.0%. Annual change +8.6%
Hometrack UK 20 City Index: Mar: Avge. price £264,800. Monthly change +0.2%. Annual change +4.0%
Rightmove: Apr: Avge. price £327,977. Monthly change +2.1%. Annual change +5.1% (asking prices on Rightmove)

Land Registry figures also show that property prices in West Berkshire have risen 6.7% over the last twelve months and, in Wokingham,prices went up by just under 4% in the first three months of this year alone.

If you’ve got a property for sale or rent in Wokingham, Binfield, Jennett’s Park, Warfield or Bracknell, just give us a call at Sears and we can talk you through your options.