No Brexit deal yet, but families are doing housing deals
- Price of new-to-the market properties increases by an average of 1.1% (+£3,447) this month, the biggest month-on-month rise for over a year and the largest at this time of year since 2016
- Family home sector outperforming other sectors in key metrics as their housing needs outweigh uncertainty:
- Holding value better, with average 0.7% year-on-year price increase for family homes compared to a fall of 0.1% nationally for all properties
- More likely to sell, with number of sales agreed down 0.4% year-on-year while the national average drop is 1.6%
- Slightly more willing to come to market, with 0.7% more new sellers than this time a year ago, compared with a 1.2% fall in new-to-the-market sellers nationally
- Brexit delay could boost spring market activity as short-term uncertainty recedes
Overview
It is usual for properties coming to the market at this time of year to see a price rise as the spring moving season gets under way, but this month’s 1.1% (+£3,447) uplift is the highest in April since 2016 and the largest monthly rise seen since March 2018. The uncertain political backdrop continues to hold back the market, with new seller asking prices, the number of properties coming to market and the number of sales agreed all below this time last year. But despite these headline falls, market activity remains resilient with would-be buyers and sellers still having housing needs to satisfy, especially in the family home sector.
Miles Shipside, Rightmove director and housing market analyst comments: “The rise in new seller asking prices reflects growing activity as the market builds momentum, egged on by the arrival of Easter. Some sectors of the market and some parts of the country have strong buyer demand and a lack of suitable supply. However, on average, properties are still coming to the market at slightly lower prices than a year ago. It’s one of the most price-sensitive markets that we’ve seen for years, with buyers understandably looking for value or for homes with extra quality and appeal that suit their needs.”
The family home sector made up of three and four-bedroom properties (excluding four-bedroom detached) is outperforming other sectors in the key metrics. Families’ housing needs, often driven by the need for more space or proximity to schools, are outweighing the ongoing political uncertainty. These properties are holding their value better than other sectors, coming to the market at asking prices 0.7% on average higher than a year ago compared to the national average fall for all properties of 0.1%. Owners of this type of property are also slightly more willing to come to market, with 0.7% more new sellers than this time a year ago, compared with a 1.2% fall in new-to-the-market sellers nationally. Finally, this sector is more likely to sell, with the number of sales agreed down by just 0.4% compared to this time last year, while the national average drop is 1.6%.
Shipside adds: “Properties in this middle sector offer the ideal escape route to families looking for more bedrooms, more space and their choice of schools. They are often second-steppers out-growing their first property and it gets harder to postpone a move with growing children. They may have already delayed for a year or two waiting for Brexit clarity, and understandably their patience is wearing thin. While some movers are awaiting the outcome of deal or no deal, many families are keeping on dealing in the housing market.”
The EU’s offer of a Brexit extension until October coincides with what is usually the busiest moving season. While it is only a postponement, it lasts for long enough to relieve some of the short-term uncertainty, and so it arrives at an opportune time for the housing market.
Shipside observes: “No doubt there are still a lot of twists and turns to come, but this extension could give hesitating home movers encouragement that there is now a window of relative certainty in uncertain times. We are not anticipating an activity surge, but maybe a wave of relief that releases some pent-up demand to take advantage of static property prices and cheap fixed-rate mortgages. This demand is clearly there as March was Rightmove’s busiest ever month with over 145 million visits to the site.”
Agent’s Views
Bruce King, Director of Cheffins estate agents in Cambridge says: “Whilst the 2018 market definitely was not all doom and gloom, 2019 has certainly seen a new vigour. Whilst activity and the actual number of sales is still lower than this time last year, the number of active buyers within the market has increased which has helped to contribute to price rises for the best properties available. We’re certainly seeing an uplift in activity as we come into the spring and summer months. The best way to describe the sentiment in the market at the moment is ‘bored of Brexit;’ fed up with sitting on their hands, sellers are now looking to get on with their lives and move house and buyers are looking to secure somewhere new. People’s reasons for moving are still as relevant now as they ever were and buyers in the market still need to upsize, downsize, move locations, move into school catchments and so on and we are seeing that they are now returning to the marketplace as they realise that they can’t keep putting life on hold. Families in particular have been most active in the market over the past few months with house moves driven by schools, job relocations or upsizing.”
Nick Leeming, Chairman of Jackson-Stops, comments:”With Brexit delays becoming somewhat of a blur, buyers across the country are getting back to business as usual and are re-establishing the search for their dream home. However, with demand currently far outweighing supply, buyers, particularly those in the family homes market, have become frustrated at the lack of new homes coming to market. This greater competition has resulted in upward pressure on prices, so it is perhaps not surprising to see today’s data showing a greater monthly price increase. The early bird gets the worm and now represents an ideal time to buy if you are upsizing. Properties that are well-priced and of a high-quality are being snapped up quickly and we expect that to continue as we head into the busier, warmer months ahead.”
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