Our February Market Comment
It’s well known that confidence is key to a healthy property market. Or it used to be at least. The pandemic didn’t dent it – quite the opposite in fact, with the average house price having risen over 11% in the past year (Source: Nationwide). Could issues such as rapidly rising energy prices, an unstable government, uncertainty in the Ukraine, and especially inflation that confidence which last month, saw buyer demand up 16% on 2021 and up 24% on 2020.
That inflation – now predicted to reach up to 7% this year (more than three times the government’s target) is the one thing that prompted the Bank of England’s Monetary Policy Committee unequivocally to increase the base rate by 0.25% to half a percent this month and more rises seem likely during the course of the year. Do remember this is still an exceptionally low interest rate of course.
Could all these factors take the edge off a potentially overheating market? It wouldn’t necessarily be a bad thing, but, as ever, the market is very robust and is already beginning to self-correct. Remember, prices are only ever driven by the balance between supply and demand and, in the last two weeks of January alone, we saw the supply of new properties entering the market increase by 10% compared to the same time last year.
We’ve said for nearly two years now that the market desperately needs more stock, and it looks like this is now happening. According to Rightmove, valuation requests from potential sellers to estate agents are up 27% on last year, 53% on 2020 and 52% on 2019.
Too many people wanting to move home for all sorts of very good reasons have sat on the fence because there just wasn’t the choice available to them for their onward purchase. That’s understandable. But it now looks like this choice is about to open up to meet the demand, as those sellers themselves have the confidence to come to market.
From our point of view we are gearing up for a very busy early Spring market where helping our sellers find and qualify the right buyer, negotiating and holding together some very complex chains will, as ever, be key to securing the highest price the market will pay. Why not join them, so you can get moving? Please feel to call us today for the right advice for you, and your property.