Bored with Brexit? You’re not alone and- whilst the last two years of uncertainty have plunged the property market into the doldrums- agents report it’s now back with a bang.
Demand for housing
House hunter numbers are firmly on the rise say estate agents. A report by the National Association of Estate Agents (NAEA) found demand from prospective buyers is at an eight-month high with numbers of house hunters registered per estate agent branch rising
by a sixth, (16%) in May, up from 265 to 307.
More choice for buyers and more sales agreed
Buyers are back on the hunt and more people are putting their homes up for sale according to the figures. The number of properties available per member branch increased
from 35 in April to 41 in May, the highest level seen since December 2018. Sales are up too, with the number of sales agreed per branch increasing for the second month running, rising from an average of eight in April, up to nine in May, making it the highest level of sales since September last year.
Mark Hayward, the NAEA’s Chief Executive, is encouraged to see the housing market bouncing back, with supply and demand rising to the highest levels seen since last year, and he thinks the reason for the uptick is that people have simply had enough of Brexit: “Buyers and sellers are no longer waiting for the outcome of Brexit and want to get things moving, particularly as many sellers are realising that it’s a buyers’ market in certain areas of the country.”
What’s happening to prices?
There’s a lot of buying and selling activity but, according to the report, more than eight in 10 (81%) of properties sold for less than the original asking price, adds Hayward: “This shows that estate agents, with buyers and sellers, are successfully negotiating a property sale, with them coming to an agreement on the value of the home.”
Andrew Montlake, director of UK-wide mortgage broker, Coreco says that mortgage approvals are now at a three- year high and he also points to Brexit fatigue for the recent upturn: “People who had put everything on hold in the run-up to Brexit Day said ‘enough is enough’ in April and May and started to get on with their lives.”
First time buyers pay more despite falling prices
You might think that falling prices plus more sales equals good news for first time buyers struggling to get on the property ladder, but the report showed a drop in sales to first timers
, falling from 27% in April, to 26% in May.
New research by finance provider Gatehouse Bank- which looked at house prices in the capital- found that, despite prices dropping overall in the city, on average by 1.9%, the cheaper areas of London, favoured by first time buyers seeking affordability, revealed that prices actually rose by 4.43% overall. The Bank says that this disparity is creating a ‘tale of two cities’ as swathes of first-time buyers miss out on the chance to capitalise on widely reported contraction in the capital’s house prices.
London prices generally have been falling since March 2018 taking an average property down from £472,357 to £463,283. But, in Barking and Dagenham, one of the most affordable areas in the capital, the average price paid by first-time buyers rose by 2.91% up from £276,701 to £284,751 in the same period.
Other areas showed similar price rises. Hackney shot up by 5.4%, Hillingdon saw a 0.67% up-lift, Hounslow rose 2.45%, Merton increased by 3.61%, and Newham received a 4.87% boost. House prices in Bexley saw a 0.58% rise. Gatehouse Bank’s CEO Charles Haresnape, believes that- while the trend for the London property market over the last year has been all about falling prices with most people hoping that at least first-time buyers would find it easier to get on the housing ladder, sadly that’s not the case: “It is counter-intuitive but in many areas popular with first-time buyers, the situation is actually getting worse. A young couple hoping to buy in Hackney today would have to find an extra £27,310 to purchase a property compared to a year ago.”
Haresnape thinks that the shortage of affordable housing for first-time buyers is forcing up prices in areas where it is generally cheaper to get on the housing ladder. “This continuing disparity means first-time buyers are experiencing a two-speed London, with prices moving in different directions as you cross borough boundaries.”
by Ginetta Vedrickas Property Journalist
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