Rightmove House Price Index
- Vendors being more realistic about asking prices
- Many buyers already have an Agreement in Principle in place
- First time buyers are the most popular buyers
Brian Murphy, Head of Lending for Mortgage Advice Bureau comments:
“The data released by Rightmove today provides us with trends on asking prices, rather than completed transactions, which gives us a useful temperature check of the current market.
As a headline, property prices cooling marginally (at 0.4%) month on month but volumes being at their second highest for ten years is unlikely to surprise many in the industry and certainly isn’t cause for alarm any time soon. It’s likely to be a reflection of vendors being more realistic about asking prices, and listening to advice from estate agents, many of whom have experienced similar market conditions previously, and therefore know the drill; don’t be ambitious about what’s achievable in the current climate unless you want a property to sit on the books for months. The slight drop in prices of properties coming to market is also likely to be reflective of the fact that many buyers are now starting their search having taken advice about a mortgage and have an Agreement In Principle (AIP) in place, and therefore budgets are slightly tighter with less negotiating room. Of course, the fact that we were in the lead up to the General Election in May could have also played a part in prices cooling slightly, but frankly given that volumes were so high, this didn’t seem to have factored into many consumers’ decision making process. This is also evidenced by the fact that the average time to sell for the UK dropped by a day from 60 days in April to 59 days in May, again underscoring that those active in the market last month were well intentioned and adopting a ‘just get on with it’ approach to their transaction, regardless of what was going on in the news.
The fact that the Rightmove data points to First-Time Buyers being the fastest growing group isn’t unexpected either, as we’re now beginning to see less investors active in the market due to the recent taxation changes which came into force as of April. With fewer landlords adding to their portfolios, First-Time-Buyers in many areas of the UK are now potentially facing less competition for the same sorts of properties, which is positive news, as those taking their first step on the property ladder underpin the rest of the market.
All in all then, it’s possibly realistic to suggest that the ongoing lack of stock in many areas coupled with what would seem to be largely undented consumer demand for properties in many areas - particularly at the entry level of the market – coupled by the consistent push from lenders to release ultra-competitive mortgage deals is likely to ensure that the market ticks along reasonably steadily for the foreseeable future. Now the outcome of the General Election is known, this will quite probably mean that any consumers who were adopting the ‘wait and see’ approach may well get back in the game over the Summer, leading to transaction volumes remaining consistent in most parts of the UK.”
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