Election fails to dampen housing market activity
AFTER a cold, dead start to the year, there were fears that the election could further stall the property market’s recovery.
But there is evidence to the contrary this week with a host of reports suggesting that house prices are edging upwards and there there are more sellers together with a glut of would-be tenants.
House prices in Yorkshire rose by 0.6 per cent in April, according to FindaProperty.com and Knight Frank revealed that country house prices in the region had gone up by 3.2 per cent over the past year.
Mortgage lending was up by 24 per cent last month and there is good news for landlords as rental demand is booming, according the Association of Residential Lettings Agents.
But Kevin Hollinrake, of Hunters estate agency, says there is still some pre-election caution. “Instructions are up 62 per cent on the previous year while sales agreed are up only 10 per cent. I believe that there are two reasons behind this differential and those are preelection caution and more optimistic asking prices.
“But the good news is that lenders are gradually getting more willing to lend, even up to 90 per cent of purchase price, and we are pretty confident that this situation will continue.”
Patrick McCutcheon, of Dacre, Son and Hartley estate agents, agrees that Easter and the election have put a damper on activity, but underlying sentiment is positive.
“Comparing the sales figures for the first quarter of this year with 2009 just goes to show how poor last spring was and what significant strides the market has taken towards reaching a more ‘normal’ level of transactional activity. I expect that to improve once May 6 has passed.”
He adds that equity rich buyers are snapping up first-time buyer property, while the first-time buyer with a small deposit is still rare. There is a shortage of homes in the £300,000-£500,000 bracket, while demand for homes over £1m is strong. “We have sold two houses over the seven-figure threshold alone this week out of the Ilkley office and we expect new listings to attract strong interest.”
Patrick says sales will continue at a steady pace, while pricing remains flat this year with possible growth next spring.
Stewart Charnock-Bates, of Charnock Bates estate agency in Halifax, believes that the market is holding up well despite the distractions of the General Election. “There is definite evidence to suggest that the recession is very much behind us. One example of this was last weekend where a property was advertised for the first time. We arranged 10 viewings and as a result of this a sale has now been agreed above the asking price.”
Will Linley, director of lettings agent Linley & Simpson, reveals demand for rental property is soaring. “For the past year or so the market has relied on the ‘reluctant’ landlord, those who couldn’t sell and had to let their properties instead. Prior to that, there was a healthy buyto-let market.
“Now we have neither, and with existing tenants choosing to stay put, there are fewer properties becoming available to re-let. As a result, our available stock is some 35 per cent down on this time last year, which is a trend being experienced by all agents across the UK.
“At the same time, demand from tenants remains as high as ever, so we are rapidly heading towards a shortage of properties which will, in turn, result in upward pressure on rents.”
HEAD TO HEAD: The election is not dampening the market.