Realty website Rightmove reports that it is now the sixth-busiest website in the United Kingdom (UK) as more people decide to get into the market, a claim that’s supported by a 2.8% increase in asking prices. Analysts at the company note, however, that most of the new blood in the market is made up of seasoned buyers with access to equity and who are able to finance. First-time homebuyers are still a rarity in the market due to difficulties with securing a loan. Even so, the increase in asking price is the highest jump seen since 2008 and is being taken as a good sign. For more on this continue reading the following article from Property Wire.
New sellers in the UK increased their asking prices by 2.8% this month, indicating that there is a renewed optimism about the residential property market, according to the latest Rightmove index published today (Monday 18 February).
At £235,741 the average price of newly marketed property is the second highest ever seen in the month of February, just £2,115 down from the February record set in 2008 prior to the collapse of Lehman Brothers and the global economic downturn.
Asking prices increased 5.2% in the North West, 5% in Wales, 4.6% in the West Midlands, 3.8% in the North, 2.7% in Yorkshire and Humberside, 1.7% in the East Midlands, 1.1% in the South West, 1.2% in Greater London, 0.9% in East Anglia, and 0.4% in the South East.
But on an annual basis prices are more mixed. In Greater London the average asking price is now £486,890, up 8.4% year on year but in the South East the average asking price is £297,036, down 2.1%.
And the South West hasn’t seen much change at all with annual asking prices down 0.1% to £249,303. The North and the North West have also seen annual price falls of 2.4% and 1.8% to an average of £142,168 and £156,801 respectively. And East Anglia has seen prices fall year on year by 0.1% to £215,037.
Wales has seen the biggest change with average asking prices now at £161,365, an annual increase of 0.9% and a monthly rise of 5%. Yorkshire and Humber has also seen a slight annual rise, up 0.2% to £149,455.
The East Midlands has seen a strong annual increase of 3.4% to £161,023 and the West Midlands is up 2.5% year on year to £186,094.
Rightmove also said there are encouraging signs of life among home movers too as its website recorded its busiest ever month in January.
However, Rightmove research indicates that those most likely to buy and sell in 2013 are the ‘old hands’ with greater access to equity and finance, who have the confidence and the will to move rather than much needed first time buyers.
‘There has been a sprightly start to 2013 and, while market activity remains patchy across locations and property type, some agents are reporting their busiest new year since the onset of the credit crunch. While encouraging, it’s far too early to pop the champagne corks as certain sectors will remain on ice until the return of wider spread mortgage availability,’ said Miles Shipside, director and housing market analyst at Rightmove.
He also pointed out that whilst it is usual to see asking prices increase between January and February, this is the highest average price recorded at this time of year since 2008. ‘This illustrates the slow but steady recovery in prices, which has taken five years, though it must be noted that the national average can mask the divide in the market between those with access to equity and finance and those without. Whilst all regions have recorded a rise this month, some of the more dramatic increases reported in the northern regions are effectively rebounds from substantial falls measured on the low levels of new listings in November and December,’ he added.
Shipside explained that the start of a new year combined with more new stock coming to market after the Christmas lull, traditionally boosts activity, though in recent years this has been tempered by the economic backdrop. However, this year Rightmove has recorded its busiest ever month in January with those planning a move searching in record numbers and contacting agents with more follow-up enquiries than ever before.
‘Interest in property has hit such a peak that Rightmove is now the sixth busiest website in the UK. Pages viewed on the Rightmove website reached a new record high in January, up by over 20% year on year and, importantly, resulted in more enquiries to agents and developers than ever before,’ said Shipside.
‘While the journey between expressing interest and closing the deal has many more twists and turns than before the credit crunch, it is a sign of increased confidence and helps build a momentum that has been sadly lacking in many local markets over the last five years,’ he added.
But not everyone shares such enthusiasm. According to Nick Hopkinson, director of property company PPR Estates, exuberance is not going to help kick start the market in the right direction. ‘Average asking prices are still below those in February 2008. Also, the average agent has only 68 properties on the books for sale, the lowest number in even the last year and is a better indicator of how little appetite there is amongst sellers and buyers to make big financial commitments at the moment,’ he explained.
‘Home ownership is increasingly the preserve of equity rich pensioners who have benefited from decades of population growth and supply constraints pushing prices up. Realistically, renting remains the only option for the foreseeable future for all but the richest aspiring home owners under 50,’ he said.
‘It is difficult to see how mortgage affordability can improve any further without a return to the type of speculative lending that led to the credit crunch in the first place. Large cash deposits and perfect credit scores are going to be required with house prices likely to remain static, at best, too for the foreseeable future, outside London’s millionaire enclaves,’ he added.
This article was republished with permission from Property Wire.