House Prices Rise and More Homes are for Sale
Recent reports from Rightmove show that sellers might not be in control of the political uncertainty and economic instability but they are in control of asking prices. This month has seen a rise of 0.8% in February, a modest rise. It is smart selling to keep asking prices realistic when considering the stretched buyer affordability.
Properties are sitting on the market for 73 days on average, almost a week longer than in January. In London, properties are sitting much longer at 78 days as can be seen in the Rightmove house price index PDF but in areas such as Livingston and Falkirk in Scotland homes are selling within 17 – 20 days on average.
The Market is moving Faster than expected
These locations are not just selling quickly – they are selling for more money. All of these areas have seen property prices rise from 5% – 9% on average over the last year. The London boroughs continue to show big variations in pricing trends. The higher priced areas continue to decline such as Kensington down by 1.9% this month and Lambeth down by 7.3%, but areas in Zone 2 such as Hackney continued to see property prices increase with a 3.6% rise on the month and the biggest increase in Zone 6's Bexley with 4.2% increase. On average, London's market saw a 4.4% monthly rise, 1% less than last year at the same time.
The increasing property prices are a good sign for sellers, but the market is becoming more balanced in the beginning of 2018. Rightmove recorded a 2% increase in properties listed for sale on the year, a modest but significant increase. Rightmove recorded more than 140 million visitors to its website last month too, signaling that buyers are eagerly on the hunt. Although the 2% increase in properties for sell will not balance the market, it is a step in the right direction and creates an optimistic feeling around the property market.
Buyers in the Midlands are most Optimistic
The optimism in the Midlands may be at the highest. Buyers in the market are willing to spend more and spend quickly in the fast selling market. Dixons in Bromsgrove reported that every property listed in 2018 has been sold, under offer or has high viewing rates and that properties are selling for more than their asking price. It is important to remember that national UK figures are a balance between the quick selling properties and the slowed markets. Buyers and sellers should focus on their local markets supply and demand before making any big purchasing decisions.
Furthermore, the price rise momentum should remain realistic. As the market's resilience continues to increase property prices around the UK and the hot spots in the Midlands are increasing by more than 5%, it can quickly cool off the market again if prices continue to stretch buyer's affordability and as discussed recently inflation has increased faster than wages which in turn us putting more pressure on how much buyers can afford when buying a new house. The buyers demand and enthusiasm is there, but the question is if sellers are going to match it, or continue to wait for the highest possible price.