Rightmove have now published their December house price index. Here are the highlights, courtesy of Miles Shipside, Rightmove director and housing market analyst.
Rightmove says strong November sales outweigh uncertainty as they forecast 2% rise in 2017
- Price of property coming to market falls by 2.1% (-£6,511), exactly in line with seasonal average of last six years
- Rightmove forecasts 2% house price increase in 2017, the seventh consecutive year of rising prices:
- Buoyant November indicates upwards price pressure going into next year, though tempered by ongoing uncertainty and increasingly stretched buyer affordability
- Demand up in November 2016 compared to 2015: website visits up by 9%; sales agreed up 5.2% nationally and up in all regions except London
- Supply still tight with new listing numbers up by just 2%, and available stock for sale per agent down 5%
The price of property coming to market saw its usual seasonal fall this month, down by 2.1% (-£6,511). This is exactly in line with the average over the last six years, and so is not unexpected. The big surprise this month is the strength of buyer activity, with sales agreed up by 5.2% on November last year in spite of the backdrop of Brexit uncertainty.
Miles Shipside, Rightmove director and housing market analyst comments: “For the housing market the uncertain outlook has meant a head and heart tug of war between ‘stay put’ and ‘carry on moving’. After a pause the mass-market seems to have opted firmly for the latter in most parts of the country. As we come to the end of the year these figures showing high levels of sales agreed and dwindling numbers of homes for sale give a far greater level of reassurance about the outlook for 2017 than was previously available.”
Rightmove 2017 forecast
Although the market has built up some momentum which we expect to continue into next year, the uncertainty plus increasingly stretched affordability will continue to weigh on house prices, so our forecast for 2017 is for modest price growth of 2% nationally. We forecast Inner London to remain weak and prices to fall by a further 5% in 2017, as its price bubble continues to deflate, whilst Outer London is predicted to record a similar increase to this year of circa 3%.
Shipside predicts: “The price of property coming to market in 2016 is currently up by 3.4% compared to a year ago, so while a forecast rise of 2% in 2017 is a lessening of the pace, it would still be the seventh consecutive year of rising property prices. As well as prices moving out of reach for some buyers, the sword of Brexit uncertainty hangs over the market, an unknown factor that may – or may not – have damaging consequences for the economy and confidence. There was a bout of jitters with the unexpected referendum result, albeit now seemingly short-lived, but more may arrive after Article 50 is invoked. For the time being any nervousness is being over-ridden by high demand for the short supply of suitable homes for sale in the lower and middle market in many parts of the country.”
High November demand looks set to carry through to 2017
Rightmove website visits are a lead indicator of the need for housing and desire to move, and are up 9% from 101 million in November 2015 to 110 million last month. This activity has fed through into a considerable rise in sales agreed, up by 5.2% nationally when compared with the same month last year. All regions except London are selling at higher levels than a year ago, with three regions having increases of over 10%. They are Yorkshire and the Humber at +15.4%, the North East at +13.3% and Wales at +11%. While London is down by 7%, it is a considerable improvement on the 18% decline measured in October.
Shipside observes: “Given the immediate post-referendum state of shock in July, these sales agreed figures are quite remarkable, with nine out of ten regions ahead on last year. While not unexpected in the north of the country, it also includes all southern regions except London. Demand for mass-market housing remains undimmed, though buyers’ budgets are restricted and agents report that over-priced property is being shunned. Cheap and available mortgage money is a big factor in driving demand, and continuing market buoyancy next year will depend on banks remaining willing and able to lend.”
Supply still restricted and looks set to remain so in 2017
Supply remains tight compared to a year ago, in terms of both new-to-the-market listings and available stock for sale. Fresh supply is little changed, being only 2% above last year, failing to keep pace with and replace the 5.2% increase in sales agreed. Consequently, the number of available properties for sale per estate agency branch is down by around 5%, dropping from an average of 59 to 56.
Shipside concludes: “Demand from first-time buyers looking to buy rather than rent will continue, fuelled by monthly mortgage repayments being cheaper than rent, and rents forecast to rise further. Second-steppers’ family needs for more space and the right school catchment areas will help that sector, especially as their ability to trade up is assisted by lenders keen to attract their quality business. The upper end of the market, where transactions are often more discretionary, will still hang back as the cost of trading up is often a big jump for less perceived gain than in cheaper sectors. What is certain is that we will not have a skewed first quarter like this year’s, which was driven by April’s buy-to-let stamp duty deadline, and that may result in transaction numbers in 2017 being slightly down on 2016.”
The regional trends show the seasonal monthly fall referred to by Miles, but overall the annual prices are up across the country.
London – a tale of two cities?
Interestingly, London’s usually expensive boroughs of Kensington & Chelsea and Islington took a bit of a hit in December. No doubt it will be business as usual from January 2017.
Average time to sell nationally
Rightmove found that it took on average 67 days to sell nationally. Interestingly, our experience at I Am the Agent was that if a properly was well-presented, with the advertisement carefully thought out and prepared, properties could sell much faster than that; in a couple of cases we had properties achieving their asking price within two days of going on to the market.
Our IATA Essential sales package at £399 inc VAT offers free pro photos. The sellers who achieved quick sales with us used the photos to really enhanced the listing and showcase their property to its best advantage, enticing searchers to look in more detail at the listing.
Asking prices have been steadily going up since November 2011 reflecting the lack of supply caused by the shortage of housing stock coming to market.
The monthly change in average asking prices peaked in February, just before the changes in the stamp duty regulations.