The price of property coming to the market in the UK increased by 1.4% in January at a time of year when prices usually fall, according to the latest index from Rightmove.
It takes the average national asking price to £273,275 and means prices have increased by 8.2% in the last 12 months.
But it points out that even although the number of properties on sale has increased by 2% this if failing to replenish agents’ historically low stock and currently levels are 10% below the same period last year.
Sales activity has been boosted by Stamp Duty savings of up to £1,250 for some first time buyers and average property prices in this sector are down by £1,132 this month.
However the firm reckons that despite continued low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014 due to election jitters and mortgage restrictions. It believes that lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose.
A closer look at the figures show that prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce back. More people are looking for property than last year, and more sellers are putting their property up for sale.
Miles Shipside, Rightmove director and housing market analyst, said:
“Early 2015 statistics currently point in the right direction for home movers, with the Chancellor’s Stamp Duty reform perhaps being the spur for people to get on with moving. There are more positive signs of early bird activity rather than pre-election jitters or economic worries deterring prospective movers.”
“The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop.”
Rightmove’s updated House Price Index now tracks typical property prices and supply for the main market sectors, including first time buyers, second steppers and the top of the housing ladder.
It says that with the average first time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250.
“Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit.”
“First time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market in the first time buyer sector has increased by 10.5% in the last year.”
The index also shows that visits to the Rightmove website were up over 10% in the first 13 days of January versus last year. In addition Rightmove set a new record for pages viewed on the website on Sunday 11th January. Shipside believes that these early indicators of increased property interest, combined with estate agents reporting low stocks of appealing property in popular locations, should give encouragement to prospective sellers.
However, Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014.
“Election jitters could lower the number of property transactions rather than lower prices, resulting in a moderate reduction from the high volumes seen in 2014, but with average prices driven up by the more resilient activity in popular locations.”
“In addition, we predict that many buyers who have jumped the hurdle of lenders’ selective criteria to secure a mortgage will be fussier about the home they buy. The lack of the right quality property situated where people want to live may cause some to postpone their move.”
Shipside predicts that the popular properties that most people want will remain sought after and will remain both highly prized and priced. Less attractive property is available in many locations but has often been on the market for some time, though it could be an option for choosier buyers if the seller is more negotiable on price.
“Buyers deemed mortgage worthy will value their hard won purchase pots and want to spend them wisely. That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short.”
“A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly.”
Rightmove believes that 2015 will be the ‘Year of the Selective Mover’ on two counts, firstly because lenders have selected them as a good risk to lend to, and secondly because they will be very selective about which properties they choose.
“The high traffic volumes on Rightmove not only indicate underlying demand, but also people regularly searching for a property that suits their needs. With insufficient new build over the last few decades and a systemic change in the makeup of our current housing stock, buyers are dissatisfied with, and therefore dismissive of, some of what is up for sale.”
“While you cannot change the location of a property, sellers can improve the appeal of their home in other ways to persuade today’s choosier buyers that the positives outweigh the negatives. Getting advice from estate agents about how to prepare or adapt your property ready for sale, pricing correctly to attract value-conscious buyers, and then getting it in front of as many of them as possible will be very important in 2015.”
Simon Gerrard, president of National Association of Estate Agents (NAEA) said that the start of the year has been a strong one.
“More people seem to be putting their property on the market early this year, one explanation for this is that they are doing so rather than waiting for the normal seasonally busy time of Spring.”
“This is most probably because spring 2015 will coincide with the General Election that could lead to uncertainty in the market at that time. There is still more demand than supply, and sellers with property values near the old Stamp Duty thresholds are now able to market their property for its true worth, both of which are contributing to higher asking prices.”
“Overall I think we’ll see a strong first quarter to the year, especially as potential buyers are now getting used to what is expected of them with the stricter lending criteria.”