Post-election, the jury is out on sales – but we can conclude that estate agent hype was overzealous.
According to recent figures and our experience, homeowners now spend about three times longer in their properties than a decade ago. With new buyer registrations up 10 per cent between April and May alone, stock levels are declining steadily.
Valuations are also down, which shouldn’t come as a surprise despite agents talking up the market, as many potential vendors are withholding their property in anticipation of a price increase.
Ironically, procrastination is the enemy of the upgrader as price rises don’t increase in isolation. If a £500,000 apartment increases by 20 per cent to £600,000, a £1m house increasing by the same amount would be valued at £1.2m, which would see the upgrader lose £100,000.
But for mere mortals under the £2m mark, it’s business as usual, with a market emancipated from external influences and driven instead by the traditional factors of supply and demand. It’s worth noting that Stamp Duty over £2m is extremely prohibitive and we anticipate a lag in the recovery of this sector. Prices will increase but only because the supply side will remain weak.
The percentage of tenants renewing their contracts in May was the highest it has ever been, suggesting that the rental market is particularly robust at the moment.
Fortunately, there are a number of buy-to-let investors looking to get into the market, which is sustaining our supply of rental properties.