Despite two base rate rises, 2022 has started in brisk fashion. Rightmove and Halifax are reporting a 0.3% price rise in January and Halifax 0.8%. The main driver of these rises is the gap between supply and demand. According to Rightmove, demand is 15% higher than it was this time last year. At the same time, agents are reporting record low numbers of properties on their books, with the average falling to just 12 per branch.
Tim Bannister, Rightmove’s Director of Property Data comments:
“New Year sellers and buyers have been quick off the mark this year, with Rightmove recording the highest ever number of Boxing Day sellers coming to market. These early-bird sellers who got themselves ready to come to market are now benefitting from the busiest start to the year that we’ve ever recorded. People who have made it their New Year’s resolution to move are finding asking prices are within just one per cent of the record from October last year and are at the highest level ever recorded for first-time buyer type homes. All of the signs suggest that prices are likely to continue to rise until more choice is available.”
The supply of new properties coming to the market, though, is showing signs of improving. The number of valuation requests was up by 44% in the first working week of 2022 compared to the same period in 2021, and by 48% when compared to 2020. And these properties will soon begin appearing on the market. In addition, affordability is likely to become increasingly stretched. Inflation and rising energy prices are pushing up the cost of living and the base rate is expected to continue on its upward trajectory until it reaches around 1.25% to 1.5% (see this month’s finance section).
Even though buyers are therefore likely to have less money in their pockets, prices will continue to rise. Albeit at more sustainable levels. Despite the ongoing improvement in supplies, there is still likely to be a shortfall.
And, so far, mortgage lenders are planning on raising borrowing costs only gradually. It is also looking increasingly likely that the pandemic is now coming to an end, giving the economy a significant boost. As a consequence, most commentators are sticking with their forecasts of house price growth of around 3% to 5% this year.
All the indices continue to show remarkably strong annual growth figures, ranging from 7.4% (Zoopla: Dec 21) to 11.2% (Nationwide: Jan 22).
Nationwide: Jan: Avge. price £255,556. Monthly change +0.8%. Annual change +11.2%
Halifax: Jan. Avge. price £276,759. Monthly change +0.3%. Annual change +9.7%
Land Registry: Nov: Avge. price £270,708. Monthly change +1.2%. Annual change +10%
Zoopla: Dec: Avge. price £242,000. Annual change +7.4%
Rightmove: Jan: Avge. price £341,019. Monthly change +0.3%. Annual change +7.6% (asking prices on Rightmove)
West BerkshireAvge, price is now £438,331, up 2% over the last 12 months. The average detached propertiesare selling for £638,996,semi-detached onesfor £385,915 and terraced properties for £317,299.
If you’ve got a property you’re thinking of selling or renting in Wokingham, Binfield, Jennett’s Park, Warfield or Bracknell, just give us a call at Sears and would like an up-to-date valuation, just give us a call.