2014 Summer Market Report
08 Aug 2014
Statistic, statistics! It's so easy to be drawn in by newspaper-selling headlines that compare one house price index with another or one region with another, which can be very confusing! The key is in the realistic interpretation of these differences without agenda! There is not enough space here to explain the market comprehensively but here are some key observations.
House Price Growth Slowing!
Shock, horror! We thought we were on a roll! However, what this really means is that property price indices are now being compared with the reported figures from the same time in 2013, when the market really started booming, rather than against the flat market from earlier times, so today's grown is bound to appear less dramatic, even if some reports appear to show it going backwards! E.g. Rightmove reports a monthly fall in London asking prices of 0.5% and 0.8% nationally.
In most places, property prices remain good value for money in relation to inflation. Normally prices would rise above inflation, yet even in London about a third of boroughs have failed to do so since the crash. Nationally, average prices are still lower than they were in 2005 in real terms. (Source LSL)
The pent up demand from frustrated buyers has mostly abated with many of those who bought during the recent high having now completed their transactions. This has left a fairly "traditional" summer market, albeit with buyers being offered some properties whose asking prices still reflect the overly-ambitious hopes of sellers who might have been led by the headlines rather than reality.
Supply of Property.
An acute lack of supply exacerbated the price hike earlier this year. However greater confidence in the market has now prompted more people to move, unlocking a freer market. The supply of available property is now up by a 9.6% nationally year on year. It is noteworthy that London's increase in stock is up a whopping 23.2% (Source: Rightmove)
Increasing supply, abating demand and talk of rising interest rates suggest that the market is returning to "normal" (whatever that is) and now is probably as good a time as ever to either buy or sell without concern that anything dramatic is about to happen!
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