Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:
“The report published by Rightmove today provides analysis on asking prices, rather than completed transactions, and therefore offers a ‘temperature check’ of the current market in terms of sentiment. As we head towards the end of the year, the data suggests that whilst asking prices have cooled slightly, they are on average higher than they were for the same period last year, so whilst growth is more muted, we’re still seeing upwards movement in most parts of the country on an annual basis. The biggest gains on asking prices on a year on year basis are First Time Buyer properties and Second Stepper homes, both of which are recording 3.5% and 3.6% growth in prices respectively. It’s easy to understand why; there is still very much a desire to get on the ladder or move up the ladder. According to HMRC’s figures, we’ve seen such a steady number of transactions over 100,000 every month this year, which does underscore continued consumer confidence, so the fact that entry level to mid-level market properties are still seeing house price growth isn’t surprising. Also, due to the fact that a lot of discretionary movers have disappeared from the market in 2017, it’s easy to understand that the upper-end of the market is seeing more of a squeeze in terms of asking prices. There’s less demand, and those who are moving at this level are perhaps more sensitive to the current economic and political climate.
That all said, we would expect to see a slight cool-down in asking prices as we head towards the Christmas holidays, as this is seasonally the norm, and therefore no great cause for concern. Anyone on the market currently is clearly motivated to sell, and therefore is marketing their home at a realistic price in order to do so.
In terms of the market going forward, it’s still too early to tell if the recent introduction of the Stamp Duty exemption for First Time Buyers will make as much of an impact as the Government hopes, or if any saving will be mitigated by the price of properties coming to market that would fall within the exemption amounts being marketed at a premium due to a rise in demand, which has also been predicted by some in the industry. What is safe to say is that, in a year where we saw many potentially disruptive factors such as Article 50 being triggered, coupled with the first interest rate rise in nine years last month and an ongoing economic backdrop which at best could have been described as cautious, instead of bringing the UK property market to its knees, it’s remained consistent and steady in real terms, which will provide us with a stable start to 2018.”
To read the full report, please click here.