June market snapshot
The UK property market and certainly Bristol's has been extremely busy so far this year. As demand remains very high, new research has found only 5% of buyers would consider abandoning their plans to buy a property if they miss the stamp duty deadline in England.
The study by Savills found that just 10% of purchasers may look to renegotiate on price, despite a majority of buyers now expecting to miss the 30th June deadline. The so-called ‘race for space’ that has driven the UK’s housing market over the past year is a trend that looks set to continue, with 54% saying that extra living space is now a top priority.
Let's take a closer look at the property market in June.
UK inflation rose to 2.1% in May, up from 1.5% in April as the easing of restrictions sparked a jump in consumer spending and a rise in fuel and clothing prices.
The Bank of England forecast the economy will grow by 7.25% over the course of 2021, as restrictions imposed due to COVID-19 are lifted. Interest rates remain at 0.1%
Many businesses are recruiting staff to deal with pent-up demand as restrictions started to lift. However, around 3-4 million workers remain on furlough and as yet the impact of the 4-week extension to lockdown easing on the economy is unknown.
Tim Bannister, Rightmove’s Director of Property Data comments: “Buyer demand remains very strong, though with an all-time low in the number of properties available for sale and new stock at higher than ever average prices.
The price of property coming to the market rises by 0.8% (+£2,509) this month, pushing the national average to a new record high (£336,073) for the third consecutive month. This is a much smaller rise than last month’s 1.8% or April’s 2.1%, which alongside analysis of the activity of millions of home-movers on Rightmove, indicates an early sign of a slowing in the pace of the current hectic market. However, it is still the largest rise at this time of year since 2015, buoyed by the strength of both the top end of the market and hotspot lifestyle change locations.
Since the market re-opened last May in England we have seen huge jumps in the numbers of sales being agreed, but these are now rising at a slower pace. Record low interest rates and stamp duty tax reliefs have helped many to afford higher prices, satisfying their pent-up desires for a new home fit for a new era.
The number of sales agreed by estate agents in May was 17% ahead of the comparable period of 2019. The average number of properties available for sale per estate agency branch is at an all-time low.
Buyer demand has been strong since the start of 2021, creating one of the busiest sales markets in years. The value of homes sold subject to contract in the first 15 weeks of the year, is almost double 2019 and 2020 figures (Zoopla). The Dataloft Demand Index, monitoring hits on agents’ local housing insight page, suggests housing market demand is up 147% on last year.
Mortgage approvals in April for house purchases were 30% higher than the April 2014 to 2019 average and an astonishing 439% higher than April 2020. Gross mortgage lending in April was £23.9 billion.
The above has resulted in new record highs for prices in all countries and regions of Britain, further stretching affordability for mass-market buyers whose ability to move is also affected by an unprecedented lack of choice of property to buy.
Annual property price growth was 8.9% in the year to April. The average price of a property in the UK is now £250,772. 32% of properties sold for above their initial asking price in April, the highest percentage ever recorded according to the latest data released by the NAEA. At present they estimate there are 16 buyers per available property on the market.
The average new seller asking prices continues to rise, hitting £333,564, setting yet another new record (Rightmove). Supply to the market is at a similar level to the long-term average but demand continues to far exceed supply, 52% higher in April 2021 versus April 2019.
Mon 21 Jun 2021