In spite of the freezing weather, the snow, the hail and the frankly general misery that the (allegedly) Spring-weather inflicted on the general population in March 2013, the property market didn’t do too badly. House prices seem to be moving in the right direction (if you’re an owner or a seller), though there was seemingly contradictory information about mortgage lending being down. However, George Osborne, Chancellor of the Exchequer, made an announcement in his Budget of 2013 that might have a huge effect on property buyers and sellers throughout the UK. These Budget 2013 proposals relating to housing, and in particular the Help to Buy Scheme, are a bit more detailed than we can squeeze into one snappy wee newsletter, so I’ve taken the liberty of putting them in a separate Blog post. For more information on that one, go back to our Blog (www.mov8realestate.com/blog) or, far better, read the rest of the article and click on the link at the bottom of this post!
As is my way for this forum, I’ll start this month’s property market update what’s been happening in the general property market and then let you know what we are actually seeing happening in real life, which often isn’t quite the same thing as what is written in the Papers. So, on with the show, for answers to what’s been happening in March 2013 and what Hungry, Hungry Hippos have to do with the Scottish property market, read on…
Press Coverage of the Property Market
House Prices Up
House prices have risen in the past year, according to both Halifax and Nationwide, two lenders who track the value of properties that they provide mortgages for and who publish these statistics monthly. Monthly fluctuations do affect these figures and many people prefer to compare a three month average with the same period from the previous year, however even by this standard prices have still gone up. Nationwide reported a UK-wide rise of 0.8% whilst Halifax reported a rise of 1.9%. Three caveats though…!
One: This compares one month of this year with one month of last year so it’s prone to fluctuation and the three-month compared with the same three months last year measure does not look as optimistic, though it is still positive.
Two: This is not based on all properties in the UK, it’s only based on properties that these lenders have provided the mortgages for.
Three: It’s based on the whole of the UK and London prices went up by 6.3%, so that will skew the figures given the relatively higher value of properties in that part of the country.
Full story at (and please don’t read their explanation of the Help to Buy scheme…it is hopelessly confusing…read ours instead!): http://www.bbc.co.uk/news/business-21964067
Mortgage Lending Down
Mortgage lending was reported to have fallen in February 2013, compared with February 2012, with the number of mortgages extended to borrowers being 6% lower than last year and being at its figure since last July (http://www.bbc.co.uk/news/business-21923828). What does this actually mean? Well, it means that less people are borrowing money to buy houses, which probably means that less people across the UK were buying properties in early 2013 than in early 2012. But is this necessarily a problem if you want to buy or sell a house?
Not necessarily: it just depends whether the supply of properties to the market goes up or down too. If there suddenly are proportionately more properties on the market than there are buyers, this could put a bit of pressure on property prices. However, it might not actually be as a result of a lack of willing buyers: this could potentially have something to do with potential sellers’ attitudes too.
It is possible that there is actually a lack of good housing stock coming to the market in order to entice buyers to buy. The number of prospective buyers could be just as high as it was a year ago. Certainly, we are seeing a slower take-up of property sellers deciding to take the plunge and put their properties on the market at this time this year than at this time last year. That has been in part down to the poor weather making sellers want to hang-off until the weather improves, not just because people want to attract buyers for their houses when Spring has sprung but also because, frankly, people don’t tend to make big decisions as readily when they are in a poor mood and the weather in the past month or two has certainly had a negative effect where that is concerned.
So should we read too much into these figures? In brief: probably not! However, they are indicative that a little bit of caution can be offset against any optimism caused by the reports of house prices going up.
What’s Been Happening in Real Life and Away from Statistics and Press Articles?
Quite honestly, March 2013 was excellent and disappointing in equal measure as far as our local property market was continued.
First the bad. After speaking to dozens of property sellers in the past three or four months, all of whom were waiting until Spring to put their properties on the market, we have been champing at the bit to get a glut of properties on the market to feed the voracious appetites of the property buyers who have been registering in huge numbers on our buyer database. However, the weather seemed to suck the life out of absolutely everyone, potential sellers included, made it difficult for valuers, photographers and surveyors to get out to our clients and generally put the brakes on much of that activity. As a result, many held-off putting their properties on the market, leaving a lot of Hungry, Hungry Hippos (or ‘property buyers’ in common parlance) waiting another month for a good feed.
Now the good. These Hungry, Hungry Hippos have been snapping up properties all month in great numbers. We haven’t quite got to the point we were at for the past four months where we sold more properties than we put on the market, but we weren’t too far off again this month, and that’s hugely unexpected at this time of year. We also negotiated a disproportionately large number of purchases on behalf of our clients, all of which just reinforced the feeling that buyers are absolutely champing at the bit, waiting for a small flood of properties to hit the market, as usually would happen in Spring. So it’s incredibly encouraging to see demand continue its very strong start to the year. The great news too is that prices seem to be robust and that, although of course we’re not seeing a run-away property prices bubble (a good thing) we are seeing a continuation of the house price stability that we’ve been seeing in the past couple of years.
And what’s going to happen in April? Well, here’s hoping that, even if the temperatures aren’t going to bounce back with a vengeance, we’ll have a relatively dry and sunny month and that this positive energy will transmit throughout property sellers who will provide the supply of marbles that can feed the hoards of buyers lining-up for a good release of quality housing.
As promised, for our Budget 2013 Special and a full breakdown of the Help to Buy scheme, CLICK HERE!