So far in 2017 the property market has taken a few unexpected twists and turns. With the uncertainties brought about by the Brexit vote and the political fallout from the General Election it would have been reasonable to expect a highly volatile property market as the shock waves hit.
This has simply not been the case and the UK housing market has, and continues to respond robustly. Sellers and buyers have shrugged off any perceived doubts and got on with the business of moving home. Without question the rise in prices has slowed and become more stable. The latest figures from the Office of National Statistics (ONS) shows house prices across the UK rising by 4.9% year on year. More locally I believe prices are now settling down from the big rises seen over the past few years. In the Borough of Barnet, where the average price sits at £536,046, prices in June actually fell. But this very small drop of 0.15% must be considered against the significant increases we have seen. Even over the previous six months prices rose on average by 4.86% every month. While in the Borough of Haringey, with an average price of £557,431, prices have risen by 5%. Although this is less than the six month average of 7.35% per month.
Much of the perceived fall in house prices is as a result of the over-inflated initial asking prices being peddled by some agents desperate for stock, but this is evidently not helping sellers to achieve the best possible price for their homes. In some cases where there is still strong demand, counter intuitively sellers are achieving better prices from placing their home on the market at a lower price and achieving over asking price due to competition from buyers.
Buy-to-let also remains popular despite media reports of the demise of this sector. In addition, the number of people registering with us wanting to buy is up 9% in July compared to June and is 26% higher than July last year. The type of property required is as wide and varied as the property in the area, with three and four bedroom houses remaining top of the list and an increasing demand from first time buyers for one and two bedroom flats.
This all points to a more settled housing market. The prophets of doom predicting a collapse in prices have been proven wrong as the medium to long term outlook sees a steady, but slow increase in property prices which is far more sustainable.
The rental market also has a very positive outlook. While recent figures show a slowdown in rents and in some areas a fall, this disguises the fact that the rental market is built on far sounder foundations than may first appear.
More people see renting as their only option, while there is a growing number for whom it is a preference. Many surveys are telling us there is a significant number of people who simply don’t want to buy and consider renting as their long term choice. Even though the Government has said they are committed to building more homes, there are doubts about how effective they can be and there is no sign of anything happening anytime soon. So there is no question that demand will continue to significantly outstrip supply.
Remember, the rental market and the rent that can be achieved at any given time reflects local factors and influences on a month by month basis and is mainly driven by what is available at any given time.
For example as a new development or block of flats is completed, more property will come to the rental market giving prospective tenants a bigger choice and seeing landlords having to be competitive on the rents they ask. This was starkly demonstrated as the supply side of the equation was skewed by the spike in properties coming to market over a very short period when the stamp duty reforms were introduced just over a year ago. This sudden increase is now working its way through the system and rents are now recovering. In fact, we are seeing more and more reports that there is a shortage of rental property in the market. As a landlord it is important to consider the damage a void period can mean to your overall income. Having a good tenant paying rent is more preferable to a property sitting empty at a high asking rent for a couple of months while you wait for the local market to recover. For most, owning a rental property should be considered as a longer term return both on yield as well as capital appreciation.
All in all, despite rumours to the contrary, the property market across all the Martyn Gerrard areas remains positive and strong.