Historic Market: Steady as she goes!

publication date: Jun 27, 2011
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Historical Property Prices


Historic Market: Steady as she goes!


Latest price reports for April and May show the market continues to be ‘jittery'. It appears those that are committed to buying and selling are doing so, but things like Easter, Bank Holidays and Royal Weddings distract potential buyers and sellers into doing something else, so the market doesn't look as good as this time last year.

Average House Price- England & Wales

Jan-11

Feb-11

Mar-11

Apr-11

May-11

YoY

Land Registry

£163,499

£162,215

£161,718

£163,083

£161,823

-2%

Nationwide

£161,602

£161,183

£164,751

£165,609

£167,208

-1%

Acadametrics

£221,944

£223,245

£223,356

£223,951

£223,971

1%

Smart New Homes

£215,786

£219,172

£218,344

£219,766

£228,041

3%


Comparing this year's prices to last year shows that the second hand property market is pretty stable. Volumes are slightly down year on year, and as such so are prices. Much of the reason behind the small prices is two fold. Firstly, buyers are nervous and don't seem too ‘worried' if deals don't go through. The ‘bad news' in the economy, the tightening on buyers' wage packets due to inflation and of course the continued difficulty in securing mortgage finance is dampening buyers' confidence and determination to purchase.

From a seller's perspective, they are keen to secure the best price possible, so unless they ‘have' to move, they tend to ‘over price' the property first, hoping for a decent offer. Whether an offer comes or not depends on local demand and supply conditions.

However, even though there are more sellers on the market than last year, the South East shows volumes are down by a massive 7% (information from Acadametrics), helping to push prices upwards due to the lack of supply. Other areas such as the North are seeing the opposite - largest price falls, but a slight 2% increase in volume 2011 versus 2010.

The only exception to this is the ‘wealthy' boroughs of London. London always leads us into and out of recession, so the fact that prices here are up 5% year on year and this growth seems to being sustained versus last year, suggests that most of London will perform better in 2011 than in 2010.

According to Smart New Homes "New homes continue to perform very well considering the economic conditions". Developers are doing a good job at restoring their finances with many turning decent profits this year, despite operating at half their normal volume and not being able to charge as high as the 20% premium over second hand properties they could in the ‘good old days'!

This month the average new build price hit a high of £228,000. This was a 4% increase on the previous month (April) and the first increase we've seen versus 2010 so far this year - as much as 3%. We do find though that new build prices ‘peak' for one or two months a year, so it's unlikely this is a trend, more just a ‘good month' and sign that people are typically buying at the higher end of the market.

Overall, 2011 is so far looking to be a stable year, albeit with volumes and prices performing lower than last year, while London is likely to continue to recover to 2007 levels from a price perspective. However, even London won't be able to recover volume levels until the mortgage market starts to pick up and lenders compete for business once again.

What's happening to the CURRENT PROPERTY MARKET?

For more information for buyers and sellers visit:-

What to ask the Agents to better understand your Local Property Market

Residential Property Sale

How to sell a Property in a Falling Market

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