Market Update - August 2013

What a wonderful British summer!

On the sporting front we have seen fantastic successes for the British Lions down under, Andy Murray at Wimbledon, Chris Froome in the Tour de France and, as I write, it is looking good for England in their bid to retain the Ashes verses Australia in the cricket.

Our weather fortunes suddenly changed at the end of June too with July breaking records for sunshine and heat-wave warnings becoming an almost daily occurrence.

Amidst the arrival of summer, the property market has also shown growing signs of moving forward across the UK with London leading the way and the “ripple effect” emanating outwards.

Growing confidence in a slow but certain economic recovery is helping underpin a market where pent up demand, particularly from first time buyers, has been growing for the last five years and some slight relaxation of mortgage lending requirements, coupled with increased savings and assistance from the Government via Help To Buy and other schemes is enabling many to take their first steps on the housing ladder.

Recent figures from the Council of Mortgage Lenders show that first time buyer numbers are up 50% year on year. This is good news although needs to be balanced by an increase in the supply of property to buy otherwise it will simply push prices up to unaffordable levels once again.

New home building is increasing but it will naturally take a few years before anywhere near sufficient new properties are created to meet demand every year. It is however moving in the right direction.

So what does it mean for those who own a home and are thinking of moving? Well, the market is generally strong. Whatever price range your property falls into it is being positively affected by an improved confidence and by first time buyers entering the owner occupied market.

Mortgage finance availability is good with some exceptional rates being offered on fixed rate schemes. Our mortgage advisers will be pleased to advise you on the best scheme for your needs as administration, arrangement and redemption fees vary and should be taken into account when looking at the overall costs.

Growing confidence always acts as an “encouragement” for people to move home. Whether upsizing or downsizing due to changing family needs, relocating due to work or other factors or simply for a change of scenery, the market is now showing signs of returning to a more normal level of transactions and it is expected to top 1 million sales over the coming year. The first time we have seen volumes at this level since 2006-7.

The lettings market also remains buoyant although there are some signs that rental values have peaked and, with some tenants now looking to buy, the market may not be entirely geared in favour of landlords in the months ahead. Demand is still strong but securing a good quality tenant who will meet their obligations is vital. Automatic increases in rent on renewal are reducing and savvy landlords are ensuring that tenants are well looked after with well managed properties attracting the best returns.

As the main holiday period is now in “full swing” there is inevitably some disruption as people’s moving plans fit around family holiday commitments but, anecdotally, activity levels remain strong.

As summer inexorably gives way to autumn the market is expected to continue to shine, just like the weather!

Naturally, if you are thinking of selling or buying, letting or renting, the teams at our Eastcote and Ruislip Manor offices shall be delighted to discuss your requirements and be of assistance.

Peter Lawrence
Managing Director