It doesn’t look like any changes the Government or the Bank of England have made have dampened the housing market at the beginning of this year.
Recent research from RightMove says that although there is a risk of higher interest rates home-owners seem to be in a confident mood with December 2015 being the best year since the financial crash.
Top points listed by RightMove in January 2016 are:
- Prices of property coming to market is up 0.5% (£1,509), the second highest Christmas/New year period rise since 2007.
- First snapshot of 2016 sees demand surge with RightMove visits up 21% in the first working week of 2016 compared to same period in 2015.
- 6.6% year on year jump in number of newley-marketed properties in their favoured market sector to highest New Year level since 2007.
- First time buyers have hardly risen (0.1%, +£209) suggesting the impending stamp duty levy could be having a calming influence.
Nationwide announced in November a 0.1% rise in price with annual house growth falling to 3.7% from 3.9% in October. Their Chief Economist Robert Gardener said that policymakers such as the Chancellor are focussing on the need to increase home building; only 135,000 new homes were built in England in the twelve months to September 2015, well below the around 220,000 new households that are projected each year over the next decade.
The Land Registery figures say that house prices rose 0.4% in October 2015 with the average house price in England and Wales now at £188,270. More interestingly the number of properties sold each month decreased with 77,046 being sold from May to August 2015 as opposed to 82,748 the year before.
Where does this leave us? With it recently being announced by the Liberal Democrats, according to their latest research, the average UK house price will be £1m in 2032. How and what has not been considered in their numbers?
- At some point interest rates will rise.
- House price growth will not stay at 7.7% (It is believed that the Lib Dems used the ONS average UK house price as at Nov 2015 which was £2884,454 this was 7.7% higher than the same month a year before. But it’s not going to do that every year.)
- More properties will be built. The government have increased it’s housing budget and committed to building more.
- Buy to let landlords have lost their tax relief and there is a 3% extra tax charge on existing stamp duty rates for additional properties from April 2016-02-05
It will be an interesting next six months.
Sources: Rightmove, Nationwide, Land Registery & The Telegraph