Posted by Dan Boyes BSc (Hons) CPEA on Mon, 2012-05-28 13:17
Better mortgage availability has given a confidence boost to deposit-rich buyers, helping to fuel buying and selling activity for good quality properties in desirable locations.
Optimism among home-movers has reached a nearly two-year high, according to Rightmove’s latest house price forecast.
More than a third of buyers and sellers (35 per cent) expect house prices to be higher in 12 months’ time - the highest proportion since the third quarter of 2010.
Negative sentiment was down to its lowest level for seven quarters, at 20 per cent, according to the property search website. Rightmove said there was evidence that the most optimistic home-movers are deposit-rich buyers and sellers of the most desirable properties in better-heeled locations. The survey showed that house price confidence is strongly influenced by the access to mortgage finance. Both “price optimists” and “price pessimists” cited mortgage availability as the main reason for their expectations. Miles Shipside, director of
Rightmove, said: “Confidence plays an important role in motivating those who can afford to buy to actually go ahead and transact. By self-selection, many of them are hunting in the same better-heeled locations, which in turn builds greater momentum and price rise expectation in these more affluent areas. Conversely, lower levels of activity in less well-off areas spreads negative sentiment, fuelling falling price confidence.”
The website added that better access to mortgage finance for buyers of prime property is leading to more buying activity at the top end, relative to the rest of the market, which in turn is contributing to stock shortages. This, the website said, will be pushing prices up by a greater than average extent in the most desirable neighbourhoods. Half of home purchasers said that suitable stock was their biggest concern about buying.
Mr Shipside said: “Those looking to buy this year say their biggest concern is finding a suitable property. This is leading a big chunk of those at the sharp-end of the property market to forecast higher prices as the lack of suitable choice will encourage them to pay a bit more to secure the right home when they find it. Those who can proceed will often be competing in the same locations as other deposit-rich buyers which could lead to increased rivalry for the most appealing properties.”
At Alexandre Boyes we have noted that there is a distinct shortage of properties on and coming to the market, especially in the family sector, as many will wait to secure placements for siblings in various schools rather than move and take the risk with the ever shrinking catchments the schools now can offer. This is further compounded by ever increasing asking prices in the higher price brackets as the shortage of properties is making more agents over optimistic, and the numbers of rental applicants are happy to stay put rather than pay these exaggerated asking prices. But as usual if the property is sensibly priced, there are a good number of unencumbered buyers wishing to purchase a little piece of this beautiful town we are lucky enough to call home.
The latest regional house price indices appear to back up the view that more desirable locations are faring better, with higher asking price growth in London and the South than in the rest of the country. Asking prices in the South East have risen by 3 per cent in the last twelve months, according to Rightmove, from an average of £307,728 to £316,245.
In Rightmove’s most recent house price survey, Mr Shipside said: “The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the south and London in particular. Even within regions there are micro-market hotspots where demand from those that can buy and the confidence and momentum it engenders are helping to push asking prices to new record highs.”
We always advise that home buyers and sellers should consider micro-market price performance before agreeing a price, as national house price data no longer reflect local housing market realities. Even within a town such as Tunbridge Wells, there can be huge variations in price expectation between different streets and postcodes. These are affected by a number of factors, such as the latest schools data.
Tunbridge Wells was recently ranked twelfth most desirable place to live in the UK in the Halifax Quality of Life survey.