According to e-surv, the average price of a home in England and Wales stood at £343,658 last month – up 0.5% on the previous month and 13.4% on the year, the highest year-on-year growth since 2004. We know the market has been flying – but could this be ambitious reporting designed to capture a headline? How can such incredible growth be achieved during a pandemic?
Rightmove concurs at £333,564, commenting that buyer demand has risen 52% since the beginning of the pandemic but that stock availability has fallen to around 50% of what it was then for houses with three or more bedrooms, with a 24% decline in availability to two bedrooms or fewer in the same period.
However, remember Rightmove’s figures are asking prices for new-to-market properties. According to the Land Registry the average UK house price for sold property stands at £234,474. Clearly various sources calculate their figures differently. But the average price is not likely to be especially relevant for most people – the key here is the rate of growth. And the Office for National Statistics puts that at 10.2% over the past year, with regional variations of course. Staggering.
But what has caused this frenzy? We know that Brexit and the pandemic put the brakes on the market for at least a year and when the floodgates opened everyone wanted to buy, supported by the government’s SDLT (Stamp Duty) concession. Although this starts coming to a tapered end from the end of this month, there’s no sign of market activity abating. In fact, despite the fact that the SDLT concession has actually stimulated price rises even beyond the stamp duty saving, affordability, along with market confidence, is strong – interest rates remain exceptionally low, many households have made considerable savings due to lack of spending opportunities during the pandemic, and, most importantly, people have had time to reflect on their priorities and have discovered that a house move could well tick several boxes for them.
For example, larger family homes are required to accommodate aging parents as an alternative to an expensive care home. And young people are staying home longer too, again putting pressure on the need for larger properties. Sadly, the rise in property values over the pandemic alone has required first time buyers to find about 9% more money towards their deposit (over £3,200 more on average). Makes you wonder if the government should meddle with market forces, doesn’t it!
Location of course is as important as ever, but there is certainly less focus on proximity to the station as people get used to working from home, possibly permanently, as a lifestyle choice. With that lifestyle, as well as a desire for a garden or home-office space, come more community-based preferences, such as being close to artisan shops, entertainment centres and gastro-pubs.
Of course, if you’re thinking of selling (and now would be a really, really, good time to do so) you can’t change the location of your property – but do speak to us about how to optimise its appeal for the current market – you might be pleasantly surprised – especially when we tell you what your property could be worth if marketed correctly. But don’t hang about – we don’t expect this strong sellers’ market to last forever!