What’s happening with house prices? Watch our Q&A recording
Since the housing market reopened in England, thousands of you have sent us questions asking what the impact has been of a seven week pause during lockdown.
In our latest live broadcast, we did our best to answer as many of your questions as we could, including, of course, the big question on everyone’s mind right now:
Have house prices fallen?
This, and all other questions, were answered by Miles Shipside, our resident housing market expert.
Miles unveiled exclusive and hot-off-the-press data showing the latest developments in the property world. If you are buying or selling, or planning to do either in the coming months, we highly recommend watching this.
If you were unable to attend our webinar, don’t worry as you can watch the whole recording here (it runs for around an hour):
Some of the most popular questions that were covered were:
- Is now a good time to sell?
- Is now a good time to buy?
- As a buyer, should I renegotiate the price of a property I’ve already made an offer on?
- Is the market picking up or slowing down?
- Is now a good time to invest in Buy-to-Let?
But if you’re pressed for time, scroll down (spoiler alert!) to read the key talking points…
Release of pent up demand
Demand had been building up for the past few years due to political uncertainty, and that demand only grew during lockdown.
The first five weeks since the market reopened showed clear signs of that pent-up demand being released. We saw numerous records broken in terms of people looking on our site and people contacting estate agents.
Supply has not increased at the same rate as demand, so this has pushed prices up by 1.9% compared with prices just before lockdown.
Prices achieved
What price have those houses that sold after the reopening of the market achieved?
One way of measuring this is by calculating the average percentage of the asking price that properties sold for – by looking at the price of the property when it was marked as ‘Sold Subject to Contract’ on Rightmove.
Using this metric, post-lockdown sales have achieved an average of 97.7% of the property’s asking price, an increase on the 96.6% seen in Land Registry data from February 2020.
Other important factors
So far, the demand for housing is at much higher than previous records.
Interest rates on mortgages are still low, which is another favourable condition for the housing market.
However, there are two key factors to keep an eye on, which will play an important role in what happens in the market moving forward. These are employment rates and mortgage availability.
It remains to be seen what employment levels will be moving forward. Opinions vary, and are purely speculative at this point. Hopefully in the next few months this will become clearer, particularly in October, which is when the government’s furloughing scheme comes to an end.
As for mortgages, at the time of the Q&A, most banks are holding back on offering mortgages with a loan-to-value of more than 85%. They have done this as a precaution, and will likely keep these measures in place until we begin to see signs of the economy picking up again.
Depending on how long this takes, we could eventually see a lower number of buyers (particularly first-time buyers) for some time, as only those with a 15% deposit or more would have the option of buying.
Is it a good time to sell?
Much of what we hear and read in the news is speculation about what might happen in the future. There are many possible scenarios moving forward, and the spectrum from worst-case to best-case is quite wide.
But the data showing what has happened so far, and what is happening in the market now, reveals a potential window of opportunity.
Demand is very strong, there are fewer properties on the market, and prices are rising. These are all favourable signs if you’re a seller, so if circumstances are right for you, it may be worth contacting your local estate agent to see what things are looking like in your area.
NOTE: The data used for this analysis is from England only, because at the time of the recording, the Scottish and Welsh markets were still effectively closed. As soon as there is data available for these countries, we will update our blog, so stay tuned.
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