Confidence in future growth and the ability to borrow money are the big drivers in the property market that affects supply and demand. In the main, the numbers of properties coming to the market is fuelled by confidence in the above and that the equity in those properties has increased. Being able to borrow enough money at a favourable rate is of course also a key factor.
It’s a tick in nearly all the above boxes for 2015, however supply has been short and, because there are better mortgage products at low interest rates, demand has been high. This has resulted in a national increase in property prices of circa 7% in a year where we have also had a General Election which traditionally slows the market because of the uncertainty of a future government’s policies.
We have seen excellent activity from first and second time buyers able to take advantage of the ‘Help to Buy Scheme’ and investors new and existing have been starting and adding to the portfolios as bricks and mortar has represented a good return on investment.
Our predictions for 2016 are that similar market conditions will prevail with single digit growth and that there will be a surge in investors buying properties which represent a 5% plus return on investment, particularly in the first quarter before the new, Buy-to-Let stamp duty takes effect.
The lettings market is predicted to stay strong and we foresee that demand will continue to surpass supply as more and more people find it difficult to get onto the property ladder to buy. According to a recent survey of over 14,000 tenants conducted by HomeLet, 71% of people currently letting said they would prefer to buy, yet 66% of these people said they would not financially be able to. We are also seeing an element of a shift in demographics and attitudes towards the lettings market, with people making a lifestyle choice to rent rather than buy. As a result, properties of varying types and prices are now in high demand, such as family homes with gardens. This, of course, is more in line with housing infrastructure and attitudes seen for many years in other European countries.
The government’s commitment on further house building is long overdue and warmly welcomed but will probably not affect the market until 2017 as lead periods for planning and building may take the majority of the year.
We know that the New Year is a great time to sell or let with an increased and highly motivated audience of buyers and tenants whose circumstances may have changed, or who have taken the decision to move, over the holiday period. There is a phenomenal 70% increase in property related searches on Google between Christmas and New Year and that property sites such as Rightmove and Zoopla see record breaking visits during the first part of the year. So now is the time!
If you would like to find out how much your home is worth, contact your nearest branch to book a free, no obligation valuation or speak to one of our experienced agents about what’s happening in your market right now.