Sellers’ Caution Urged as UK Property Prices Bounce Back in January

on Jan 19, 2015

The UK housing market is seeing an upsurge in both prices and activity in January 2015 driven by hiked asking prices and low stock levels.

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There are early signs of a recovery in property prices in the UK after the declines registered in the last two months of 2014, according to the latest data from Rightmove, the online real estate portal, which, however, has also urged a cautious approach on the part of sellers with respect to the emerging post-New Year bullish trend.
Asking prices for new property on the market in January are up by 1.4%, or GBP 3,798, and the number of new properties on the market has seen a 2% increase on last year. Nonetheless, the fresh supply is still insufficient to compensate for the depletion of agents’ stock for sale, of which a 10% year-on-year decline is a contributing factor towards the minor price hike, especially in high-demand areas.

“The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop,” Miles Shipside, Rightmove director and housing market analyst, is quoted as saying.
The company also points out that the January surge in activity on the UK housing market is also partly stimulated by a savings potential for first-time buyers resulting from the Stamp Duty reform announced in the Autumn Statement. That is estimated at up to GBP 1,250, with the average price of first-time buyer property on sale at GBP 163,251, indicates new data received from an update of Rightmove’s House Price Index methodology.

According to Shipside, even though potential savings from Stamp Duty might decrease if property prices go up, they would still make a difference for first-timers, especially in combination with the fact that property coming to market in the first-time buyer sector is now GBP 1,100 cheaper, after it saw a 10.5% hike last year.
While some developments such as new property on the market, and heightened buyers’ interest might be viewed as encouraging trends, Rightmove does recommend that sellers on the UK stay cautious, as it expects that in general it will be harder to sell in 2015 than it was in 2014.
The 2015 election is viewed as a debilitating factor that might lower the number of property deals resulting in a volume reduction of transactions but coupled with increased average prices because of greater activity in popular areas. Rightmove also predicts a discrepancy between quality and locations might lead many to put off their plans to move.
The company outlook describes 2015 as the “Year of the Selective Mover.” The reasons given in support of that label are twofold – increased caution on the part of lenders, and because of buyers’ increased selectiveness.
“Buyers deemed mortgage-worthy will value their hard-won purchase pots and want to spend them wisely. That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short. A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly”, Shipside advised.


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