Property Prices Creep Up Over Festive Period
The price of property coming to market has risen 0.5 per cent - or £1,509 - over Christmas and New Year, the second highest increase during this period since 2007. There’s also been a revealed 6.6 per cent year-on-year jump in number of newly-marketed properties, to its highest New Year level since 2007.
First-time buyer prices only increased by 0.1 per cent - or just over £200 - suggesting the impending stamp duty levy could be having a calming influence sooner than expected.
The early snapshot of home-hunter visits in the first week of 2016 is up by 21 per cent on the same period last year, to 27.8m visits, showing demand is not letting up either. While the 0.5 per cent rise in new seller asking prices is lower than the 1.4 per cent recorded in last January’s report, it is higher than every other January since 2007, before the credit crunch began. A lack of property coming to market has been an upwards driver of both prices and unfulfilled demand, though encouragingly there has been a slight 1.8 per cent year-on-year uplift in the number of newly-marketed properties.
Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or less. For several years buy-to-let investors have been enticed by high tenant demand and attractive returns, but as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.
The imbalance between supply and demand means the speed of a mortgage application could make the difference between having an offer accepted and losing out to another buyer. This makes it is even more important than ever for advisers to choose a lender that has the right technology and processes in place to offer a service that meets the demands of this fast-paced environment.
The lack of supply is making the market more competitive and an expected increase in demand in the coming months is likely to exacerbate this issue. The government must look to encourage more efficient use of current housing stock by helping more people to ‘rightsize’ through tax incentives and cuts in stamp duty.
This two-tiered approach will help to reduce the current imbalance between supply and demand and make homeownership a more achievable goal for many.