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Market Insights 2018/2019

Introduction

Welcome to market insights. When looking back on the 2018 market you can see a series of sub plots that have played out alongside the political uncertainty. These have included continuing readjustment in London with evidence this is spreading to the South, a more buoyant market as you go further north and a drop in buy to let activity leading to a lack of rental stock. Yet despite all of this, sales activity and prices at a national level are holding pretty steady compared to 2017. There are some slower markets in the south where buyer affordability has been seriously stretched, leading to a very price sensitive market. As you move further afield the landscape is comparatively stronger with significant uplifts in activity in parts of Scotland and Wales such as Edinburgh and Newport. The annual rate of price increase remains subdued for a second consecutive year, a result of national asking prices now being over 30% higher than they were back in 2010. So what does 2019 look like for your business? Underlying demand is a positive, though choosier buyers will be looking for the right
property at the right price. The skills of estate and lettings agents will be greatly appreciated by sellers, buyers, landlords and tenants, to help them navigate through the maze of political uncertainty and whatever Brexit has in store for us.  To find out the value of your home contact us on sales@howardcundeylive.com  or call us on 0800 688 9777 or visit our online valuation tool  please click here 

 

Source: Rightmove Little Blue Book 2018/2019

Asking Prices

 

 

Sellers need to be realistic about the value of their home 2014 and 2015 saw national asking prices rise by over 7% each year. Prices have continued to rise in recent years, although at a slower rate. New seller asking prices saw an annual rise of 1% in 2017, and 2018 is following a similar course.
This slower growth means that sellers need to be sensible with their agent about setting an asking price which better reflects the current market and attracts attention from buyers. Agents who were able to get their vendors to take their advice and price effectively benefited from finding a quicker sale in 2018.

Affordability

How affordable is buying a home? A measure of buyer affordability is dividing the average asking price by the average annual income, producing an affordability gap ratio.
The average new seller asking price has risen by 22% since 2014 but the average national
How affordable is buying a home? The average new seller asking price has risen by 25% since 2013 but the average national income has only increased by 12% over that period. This has stretched buyer affordability considerably. This is shown by dividing the
Asking Prices
income has only increased by 12% over the same period, widening this gap considerably.
Although still high, the ratio has decreased in the last year as wage growth has outstripped average asking price growth

Mortgage Approvals

The UK has seen historically low mortgage rates for the past decade. Home movers and buy to let landlords have taken advantage of these low interest rates by remortgaging and locking into longer term fixed rate deals.
In November 2017, the Bank of England announced the first base rate increase for
10 years, causing a spike of over 60,000 remortgage approvals, the largest number in a single month for 10 years.
Comparing 2018 so far with the same period in 2015, mortgage approvals for house purchases are down by 2%, however remortgages have increased by 32%

Buy to Let

The rise is more marked in the buy to let sector, caused by the changes in second home stamp duty tax that came into effect in April 2016. There was a surge in mortgage approvals nationally in the first quarter of 2016 for landlords looking to beat the deadline. Since then, remortgaging has accounted for the majority of buy to let lending activity. In July 2018, the proportion of buy to let lending on remortgages nationally was 72.8% compared to 47.8% in July 2014.

Transactions

 

Since 2014, transaction volumes have been running at around 1.2 million each year. In spite of more challenging market conditions and some doom and gloom headlines, 2018
is following a similar trend. Rightmove’s latest prediction is that transactions look set to reach 1.15 million in 2018.

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