In our latest blog, we explore some of the more pertinent trends that look set to shape the property sector over the coming 12 months with help from some leading expert opinion.
The New Year brings a sense of a fresh start and the housing market is no exception. With things such as the ‘Boris bounce’ affecting house prices and the number of first time buyers increasing, 2020 seems to already be a year of change and it’s only just begun.
UK house prices
Based on data from Halifax, Nationwide Building Society and the Office for National Statistics, and as reported by thisismoney.co.uk, house prices are forecast to rise by an average of 15.3% over the next five years; with a 2% rise in prices in 2020 being noted and up to 4% in the northern regions. Since 2000, house prices have risen by an average of 12% with homes selling at £233,000 compared to £169,777.
The North West has seen the strongest area for growth in asking prices which was up 3.3% in Q3 compared to the same period in 2018 according to Rightmove.*
Analysis of data compiled for The Sunday Times Home shows that in 52% of postcodes in England and Wales, there has been a post-election surge in buyer demand — the so-called ‘Boris bounce’.
Zoopla has shared the news that tenants are set to face their biggest rent increase since 2016, so now would seem a good time for first time buyers to make the move onto the property ladder. However, in a separate survey by Rightmove* of people who were planning to buy within the next 12 months, half of those asked said they couldn’t afford to buy.
“Rising rent prices may mean that renters will have less money to save towards a deposit, so the Government-backed Help to Buy scheme will become even more important,” says Property Perspective managing director John Jarvis.
“It’s a scheme that really seems to have helped people onto the property ladder, with figures showing that there are larger numbers of first-time buyers than ever before.”
First-time buyers accounted for 55.7% of home purchases in 2019 according to reallymoving.com. There was a corresponding drop in the number of 25-34 year olds who were in the private rented sector; 41% during 2018/2019 compared to 48% in 2013/2014.
“Of course,” says John, “2020 is the last full year when Help to Buy will be available in its current format. At the moment it can be used in England by first time buyers - and those who are sold subject to contract - to purchase a property up to £600,000 (£300,000 in Wales). In 2021 it will be restricted to first time buyers only in England and regional price caps will be introduced; meaning some would-be home owners in more expensive areas may be priced out of the market. We could see this having an impact on transactions during the year ahead.”
Demand for new homes remained high as we entered the New Year, fuelled perhaps by the appeal of low maintenance and good build quality. Help to buy is a key element that has contributed to the increases in supply, with over 221,000 completions reported in England since 2013 as a result of the scheme.*
For those who already have their foot on the property ladder, incentives like part exchange and agency assist are more important than ever to homebuilders. The team at Property Perspective works hard to achieve the highest possible price for every property, while achieving swift sales for existing homeowners, so those customers can go on to complete their new home purchase.
“We’ll be here for our clients throughout 2020 and have the experience and expertise to adapt to any further changes the market may bring,” John adds. To find out more about our services and how we can help you, visit: www.thepropertyperspective.co.uk and please follow us on Twitter @PropertyPerspec
*Survey & stats courtesy of Rightmove’s Little Blue Book 2019/20