Wed 03 Aug 2016
LATEST PROPERTY MARKET NEWS
The forecast for the British housing market, post-referendum, was one of doom and gloom amongst the majority of media outlets - highlighted by housebuilder and large corporate estate agent share prices plummeting overnight. One thing is for sure, no-one can confidently predict how the this will play out in the long-run, and we certainly aren’t going to have a stab in the dark!
However, what we can do is provide a real insight into what is happening now. And if we are to look at the statistics, they continue to show a reasonably buoyant residential housing market. Data from RICS shows that house prices nationally increased by 0.5% in July, compared to 0.2% in June. Year to date, annual house price growth is also up, to 5.2% - from 5.1% last month.
Anecdotally, the majority of agents outside of London are reporting that the market momentum continues to plod along, fairly unaffected. At Lovett’s we have seen an increase in the number of new listings we’ve taken on, post referendum. However we have also noticed that interest from potential buyers has dropped off a little. Nevertheless, with mortgage rates remaining low, and the continued scarcity of available properties, we believe this will level out as we move further on from the Brexit vote in June.
In an encouraging sign of a return to business as usual, sellers seem mostly undeterred from coming to market, with new property instruction numbers now slightly ahead of the same weeks in 2015. Indeed, industry behemoth Rightmove believes it isn’t all bad:
“A welcome by-product of the Brexit vote may well be that a root and branch review of the structural housing deficit is high on the political agenda, leading to a more creative and concerted long-term strategy to build more suitable homes. The abandonment of the 2020 target for eradicating the budgetary deficit may give more funding options than previously existed to make some serious inroads. This combined with a dose of post-Brexit-vote uncertainty would help lessen the upwards price pressure that has increasingly and unhealthily stretched buyer affordability in some areas.”
Interest Rates Cut Further
The Bank of England today cut interest rates by a further 0.25% after a meeting with the Monetary Policy Committee (MPC). For homeowners who earlier in the year had been bracing themselves for a rise in interest rates, its both good news and bad news. Good news as it will further reduce monthly mortgage payments - a typical UK mortgage will reduce by £22 a month. Bad news because it’s generally confirmation of a floundering economy, and will obviously effect those looking to maximise their savings. The ONS believes it will result in a £25 less in interest per year, per £10,000 saved.
Governor of the Bank of England Mark Carney has this message for the general public: “We are advising people to be prudent. Certainly, if you are taking out a mortgage, at some point over the life of that mortgage, times will be difficult. You want to make sure as a family or as an individual you can service that mortgage when times are difficult. You don’t want to lose your house or flat,”. Wise words, indeed Mark.
CLOSER TO HOME: THE PROPERTY LOWDOWN IN HUNTS
In terms of new properties coming onto the market, in the 2 year period since July 2014 you can see from the graph below just quite how sharp the drop has been in the PE19 area. From a high in August 2014 of 520 homes listed, the figure dropped by over 50% to around 250 homes in December 2015
There does however seem cause for optimism in PE19. Average sales prices continue to rise, and the past 6 months has, despite the uncertainty felt by the nation pre-referendum, also seen continued growth in the number of homes coming onto the market in our area:
At Lovett Sales & Lettings, July has been the busiest month of the year to date - in terms of new listings, valuations and completed sales. Once again, the 3 bed semi’s prove to be the most popular property type coming to market. These properties always sell well too, as they appeal to both young and established families, as well as investors looking for longer-term gains.
Graham Bond, Director at Lovetts said “applicant levels remain high both with local buyers, and those relocating from further afield to St Neots”. He believes St Neots is becoming a real local property hotspot.
“St Neots offers a wide variety of homes boosted by an active community and social scene for both families and professionals alike, who are finding the area provides a more attractive and affordable package than similar towns south of the county”.
Our longer-term view is that as long as mortgage rates remain low, Huntingdonshire continues to provide a more affordable alternative for commuters from both Cambridge and London, and is still a strong lettings hotspot for investors, the sales sector will remain buoyant with a continued steady stream of properties coming onto the market.
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