Market Update

Unbelievably, we are already two months into 2014 and time just seems to be racing by.

The national news has been dominated by the extreme wet weather and subsequent damage and flooding that has resulted. My thoughts and best wishes go to anyone directly affected.

Despite the worst weather for many years, the property market is generally showing a great deal of strength with the pent up demand of recent years giving way to action by many people who are seeing the combination of economic recovery and low interest rates as an excellent opportunity to make a move.

The Government’s Help 2 Buy scheme is also encouraging many first time buyers or those with low equity in their existing homes to step forward and, so far in 2014, the market locally has seen higher levels of demand than supply which, in turn, is fuelling price increases and creating even greater urgency amongst those looking to buy.

Many landlords are also taking the opportunity provided by the increased levels of equity in their portfolios and low interest rates to increase the number of properties that they own.

The rental market remains strong although rental increases have now slowed or stopped and landlords are, quite rightly, looking for quality tenants on decent length contracts rather than trying to squeeze the last £5 note out of the monthly rental value.

With interest rates low, yields are still attractive and, with the very real prospect of capital growth, investing in the private rental sector is increasing in popularity. It is estimated that some 17% of the UK housing stock is now in the private rental sector, some 69% owner occupied and 14% socially rented. It is vitally important that we maintain a level of choice and flexibility in tenure to meet the various demands of the public and provide opportunities for all.

Bank of England Governor Mark Carney has recently spoken in more detail as part of his forward guidance and has clearly signalled that interest rates will remain low for some time to come. Unemployment is reducing rapidly and inflation is at target levels. Growth is small but positive and the general feel is of heading in the right direction which is great for confidence and the markets.

I expect the property market to continue to move forward both in volume and prices as increasing confidence turns to activity.

To stop the market getting fraught, we will need to see more property coming to the market to more closely address the supply and demand sides of the equation. Many people looking to move are currently holding back from listing their own property until they see something they want to buy. This is always the case in a changing market but will need to change. There is nothing to lose in listing one’s own property before finding and a lot to gain. It says to prospective sellers that you are serious, it enables you to market without panicking on price and it puts you in a stronger position to buy.

Naturally the team and myself shall be pleased to advise.

Peter Lawrence