Property Natter - No more working for a week or two....

‘Schools out for Summer’ as the Alice Cooper song goes and the kids are not the only ones looking forward to their sunshine break.

The Honourable and Right Honourable Members of Parliament have also closed their briefcases and returned home to pack their buckets and spades ready for their extended stay in the Algarve or the Costa del Sol or the French Riviera.

But what will they be thinking about, I wonder, when they’re lying on their Ambre Solaired backs listening to waves lapping rhythmically against sun-kissed shorelines.

There’s a good chance it may be unfinished business.

The inflation rate is still ‘sticky’, the interest rate is still edging northwards and there are still not enough houses being built.

In fact, there aren’t enough houses full stop. That’s why rents (which hit record highs this month) are likely to continue climbing for the foreseeable.

There’s not much good news on the housing front, is there? Or, is there?

Despite some slightly more pessimistic predictions, inflation in the UK fell to 7.9% in the year to June, according to the Office for National Statistics – that’s after being stuck at 8.7% for the previous two months. The announcement was immediately greeted by a drop in mortgage rates – a very tiny drop, but a drop nevertheless, from 6.81% to 6.79%. The first in two months.

The price must be right

And even though beach-bound MPs couldn’t manage a Second Reading of the Renters (Reform) Bill before they headed for sunnier climes, they may be on the look-out for an interesting holiday read over the next few weeks. They could do worse than to pick up data specialist, Twenty CI’s Property and Homemover Q2 Report which was published this week.

It’s a real page-turner…..with a twist!

The report states that new instructions are on the rise – 11% up on Q1 – with 445,160 new properties coming to market.

Sales agreed were up by 14.5% despite the fact that prices – which may have slipped a little – still remain above pre-pandemic levels.

So what’s the twist?

The twist is that despite the economic climate, the housing market is remaining incredibly resilient. People are still selling, people are still buying, people are still moving.

And the properties that are moving fastest are the ones that have been priced correctly in the first place – which is where good agents come into their own. Offering clients sound pricing guidance is critical in these sensitive times. The crash that has been forecast since last Autumn simply hasn’t materialised but there are readjustments and sellers need to be aware (regional variations aside). 

This is amply demonstrated by Rightmove’s asking price data for July which showed that the average price of a property coming to market has fallen by 0.2% from June to £371,907. Annual asking price growth was 0.5%, the lowest since November 2019.  Agents reported that "right-priced” homes are still attracting motivated buyers due to the shortage of property for sale compared with historic norms.

Having said that, the number of available properties for sale is 12% lower than in 2019, according to Rightmove’s index. The cost of living and the consequent interest rate rises have made the cake a little bit smaller. Agents who work smarter will get the biggest slices.

And finally…..

The great divide in London property prices was exposed this week with the news that the average price for a semi-detached house in Kensington hit nearly £11 million last year. That is 24 times higher than the average cost of a semi in Barking, Dagenham and Rainham, according to the Evening Standard.

The ONS has revealed that in 25 London constituencies, the mean price of an existing semi was over £1m. The highest was Kensington at £10,893,289, followed by Chelsea and Fulham at £5,366,731.

Wow.

Until next time…