GREAT BREXIT BARGAIN HUNT
The housing market is sparking back to life as canny buyers sense a golden opportunity
WHERE are house prices heading? It is a burning question many homeowners are now asking themselves as they assess whether it is either time to move and pick up a bargain, or stay put and hunker down for the foreseeable future. Unfortunately, there is no definitive answer. Whichever housing survey you scrutinise or estate agent you speak to (admittedly, hardly the most trustworthy of professionals), the signals are all over the place. Mixed as a bag of liquorice allsorts.
When it comes to house prices, the country is as divided as it is on that toxic subject called Brexit.
In the last few days, data from property website Rightmove and estate agent Your Move suggests that the housing market remains both fragmented and subdued.
According to Rightmove, this month has been the weakest start to a year since 2012. Average asking prices, it says, rose to just below £299,000 – 0.4 per cent higher than in the previous month and 0.4 per cent above a year ago.
‘A somewhat patchy and variable picture depending on where you are in the country,’ remarks its housing guru Miles Shipside.
Your Move paints a similar picture. Its data indicates that house prices rose 0.3 per cent in December 2018 with annual price growth the most sluggish for seven years. A flatlining market, it says.
Yet it is not all doom and gloom. Far from it. While economic uncertainty, fuelled by the Brexit factor, has certainly disrupted the London housing market – and to a lesser extent the South East – the market as a whole is far from dead.
Scratch a little underneath the headline figures and there are pockets of spring-like bloom. Parts of the country are still experiencing annual house price growth in excess of five per cent. In some regions, properties are being shifted in less than 60 days while transaction levels are ahead of last year.
Where sharp house price falls have already happened – for example, in some London boroughs – it has caused a marked pick-up in the number of people looking to bag a bargain.
This has all been helped by readily available cheap finance with rates on many fixed rate mortgages below 2.5 per cent – deals that provide financial protection well into the term of any future Labour Government. Rightmove, for example, is seeing buyers pay 4.5million visits to its website daily, looking for homes to purchase.
‘Many people appear to be contemplating a New Year move,’ says Shipside. ‘Home-movers have a track record of ignoring the politics and continuing to satisfy their housing needs.’
In the London borough of Richmond, where house prices have been adversely impacted by Brexit, some estate agents remain remarkably upbeat.
Elliot Rowe is sales manager at Marsh & Parsons, one of London’s premier estate agents with an office a stone’s throw from Richmond’s busy railway station. He says buyer interest in homes is 35 per cent up on the same time last year.
‘We have been pleasantly surprised this month,’ he says. ‘There is a lot of interest in one and twobedroom apartments. People just want to get on with their lives – and are no longer waiting to see what happens with Brexit.’
Other agents are more sanguine. Richard Winckley, of Major Son & Phipps, says heavy stamp duty costs in England and Wales – resulting in an effective 4.4 per cent charge or £43,750 on a £1million purchase – has stopped many people moving.
He believes some have stayed put, preferring to spend the money they would have paid in stamp duty on a home extension or loft conversion. It is a point echoed by Edward Hall, manager of estate agent John D Wood. ‘Stamp duty is proving a real killer.’
Lee Wainwright, chief executive of online estate agent Purplebricks, is convinced now is a good time to buy. He says: ‘There are some great properties out there, interest rates are making finance affordable and owning is generally cheaper than renting.’
Key market drivers, he says, are first-time buyers and new home builds where an array of tax incentives and stamp duty breaks are making home ownership more affordable.
He adds: ‘Naturally there is caution in the air but we are seeing sellers looking to trade up or relocate. The housing market is vibrant outside London, especially in the Midlands –West and East – and some Northern towns and cities.’ Your Move’s data confirms that cities such as Derby, Leicester and Nottingham have all enjoyed house price growth of more
than five per cent over the last year – with sales taking 64 days to complete (against 80-plus days for Greater London).
A growing family and aspiration are key drivers for owners wanting to move up the property ladder – helped by keen demand from firsttimers who make attractive buyers because sellers can protect themselves against being caught in a long transaction chain. Most second-steppers are looking to expand into three or four-bedroom properties with a wishlist of a good garden, drive and garage.
Location is key, with distance to work, transport links and catchment areas for schools big considerations.
Sam Mitchell, chief executive of online estate agent Housesimple. com, says: ‘Sellers in this kind of market need to price sensibly. If you price right, there’s a buyer out there. Pent-up buyer demand has been building since December. Low interest rates and competitive mortgage deals make it an attractive market, but low stock levels in some areas have left buyers with limited choice. Sellers who market now will have their pick of buyers.’
He adds: ‘The North West and Yorkshire have good value properties on sale. Affordability is not such a problem in the North as it is in the South for families looking to upsize to a family home.’ Finally, it is still possible to track down a house for less than £20,000 – a typical pre-1980 price – in parts of Scotland and the North of England. The properties may not tick the dream home box but for a DIY enthusiast it could be the bargain they are looking for.
The cheapest property on the books of online estate agent Housesimple is a one-bed flat in Port Glasgow, Renfrewshire, with a selling price of just £4,000.