In September, the average house price hit a record high of £338,462, up 0.3% from August. However, to put that into perspective, it’s just £15 above the previous high in July, earlier this year. A lack of supply has been one of the key drivers of all the recent rises, but there are signs that supply levels are finally improving – the number of listings in the first 2 weeks of September was 14% higher than they were in the last 2 weeks of August. The booming market also means affordability is becoming increasingly stretched. As a result, many commentators are now predicting the housing market will, during the course of autumn, move to a more sustainable level of growth (source: Rightmove).
The ending of the stamp duty holiday at the end of September, though, is having little discernible effect. And, despite the recent improvements, demand is still heavily outstripping supply in many areas of the country. The imbalance is such that a new breed of buyer is emerging – ‘Power Buyers’ are those with cash, who have already sold their properties, and first-time buyers. They are currently outmuscling other buyers in the rush to pick up the best homes.
Tim Bannister, Rightmove’s Director of Property Data comments:
While the holiday-starved took their break over summer, the high ratio of buyer demand to properties for sale means that the property market remains stock-starved despite the summer lull lessening overall activity. Competition among potential buyers to secure their next home is now more than double what it was this time in 2019. To be in pole position in the race for the best property you need to have greater buying power than the rest of the field.”
Bannister goes on to advise that, if you want to be considered a ‘Power Buyer’, you will need to be able to prove that you have either sold your property or you have access to sufficient cash to complete the purchase without the need of a mortgage.
As ever, it is not a uniform picture across the UK. After months of growth, prices in Wales and the more northern regions fell in September. Prices in the South and the East, in contrast, continued to rise and were up by as much as 2.4% in the East Midlands. Since the start of the pandemic, London had been lagging considerably behind the rest of the market, but it, too, continues to improve. The drift back to work has been pushing up demand for property in the capital for some time and has now reached a point where those buyers have got their own moniker – ‘Boomerang Buyers’. Many want a London bolt-hole rather than a family home and it will be interesting to see if the current fuel shortage encourages yet more people to search for somewhere nearer work. London’s prices were up by 0.4% in September and by 0.8% annually.
Looking further ahead, one of the biggest areas of concern for the housing market was the ending of furlough and a potential surge in unemployment. The current shortages of labour in many sectors of industry show those fears may have been misplaced. The only real cloud on the horizon is the prospect of higher interest rates. They are forecasted to go up during the next 12 months, but not, according to the experts, by much.
All the indices are now starting to soften a little and that process is likely to continue during the autumn period.
Nationwide: Sept: Avge. price £248,742. Monthly change +0.1%. Annual change +10%
Halifax: Aug. Avge. price £162,954. Monthly change +0.7%. Annual change +7.1%
Land Registry: July: Avge. price £255,535. Monthly change -3.7%. Annual change +8.0%
Hometrack UK 20 City Index: Aug: Avge. price £271,700. Monthly change +1.7%. Annual change +4.6%
Rightmove: Aug: Avge. price £338,462. Monthly change +0.3%. Annual change +5.6% (asking prices on Rightmove)The average price in West Berkshireis now £455,771, up 12% over the last 12 months. The average detached properties are selling for £637,339. Semi-detached ones for £3822,404 and terraced properties for £322,575.
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.