House Price Information February
February
There has been a pronounced upswing in UK property prices according to Rightmoves February house prices index report. This is not a clear indicator that house prices are going to continue to rise but appears to be as a direct result of there being a much lower than expected number of people bringing their house to the market in January. This can of course be, to some extent put down to the significant cold spell that we have been experiencing although there is some good news. Rightmove indicated that the January search activity was a record month for them up 29% on the same period last year.
Miles Shipside, Commercial Director of Rightmove commented "a price jump of over 3% is more comparable to the pre credit crunch boom time. Sellers are setting their sights higher, and some Agents are going along with them in order to win scarce instructions. Property for sale remains scarce in popular areas, but new supply to the market has to be priced at what buyers are willing and able to pay. An average increase of over £7,000 may prove to be a bit too spicy for some buyers tastes, now that economic constraints have forced them to develop a simpler palat."
Where supply remains well below historic levels, which is especially noticeable in parts of the south, upward price pressures look sustainable. Sellers whose research indicates that there are few properties like theirs on the local market have spring pricing opportunities. Where property supply gets closer to pre crunch levels, sellers should price more aggressively having critically compared their property to recent actual sales as well as to what is currently on the market.
Average national asking prices are now 6.1% (£13,300) higher than a year ago.
It is clearly the case that sellers are starting to appear in greater numbers, but they must realise that this market is more akin to the mortgage ration times of the 1970's - 1980's than the more recent times of relatively easy mortgage availability. However, if sellers return to the market in larger numbers the current upward price pressure would not be sustainable because there would then be a limited number of buyers.
Highlights of the Report
Rightmoves February house prices index reports contained some interesting information on the market. There are clearly more buyers out there than there are sellers and this is having an effect on house prices. There is always the risk that there are Estate Agents out there who are desperate for instructions and as a result they will fight to win that instruction by overpricing. It is surprising to see that the West Midlands had the highest increase in the whole of the UK at a staggering 8%. This cannot be sustained. As we have previously confirmed the gap between what the vendor expects to receive and what the purchaser expects to pay will continue to get wider if house prices continue to rise. Sensible pricing is still extremely important and Estate Agents should be making sure that their valuations are not unachievable and irresponsible.
The highlights of the report are:
1. Scarce new sellers bump up asking prices by 3.2%, an average increase of £7.137 with London setting a new record of £427,987.
2. Monthly rise reminiscent of boom times, there has been no higher rise since April 2007 when we saw a 3.7% increase.
3. January sees record search activity on Rightmove.co.uk up 29% on the same period last year.
4. The Economic Fundamentals cannot support further price increases of this magnitude.
All areas of the UK saw an increase in house prices except the South West, North West, and North.
West Midlands & Staffordshire Housing Market East Midlands & Nottinghamshire Housing Market
