Average house prices in the UK grew by 2.9% in February compared to last year, according to Rightmove.
The latest figures from the online property website revealed that average house prices have risen by £2,589 over the past month, a 0.8% monthly rise. It means the average price of a home in the UK was £309,399 in February, just £40 less than the all-time record average UK house price that was set in June 2018.
Rightmove said this latest surge to near-record prices was helped by another record 152 million visits on its site in January, with 12% more agreed sales last month compared to January 2019. Rightmove’s data was based on the asking prices of more than 108,000 properties, or around 95% of the current UK housing market.
“There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month,” said Miles Shipside, director and housing market analyst at Rightmove. “This means that spring buyers are likely to be faced with the highest average asking prices ever seen in Britain.
“Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.
“After three years of Brexit uncertainty, dither and delay, many now seem to have the 2020 vision that this is the year to satisfy their pent-up housing needs. Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.
“It’s the first time for over a year that we have seen any sign of a return of seller confidence, albeit lagging behind the surge in numbers of early-bird buyers. Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.
“However, sellers should be careful not to get carried away with their pricing, as this is still a price-sensitive market with stretched buyer affordability. Those who over-price risk missing out on the window of increased activity that could run at least until we approach the next Brexit deadline at the end of the year.
“Now could be an excellent time to get on the market and sell, seizing the opportunity of achieving a quick sale at a decent price.”
Lucian Cook, head of residential research at Savills, said: “Since the election, we’ve certainly seen a significant uptick in new buyer demand in the prime market which creates a real opportunity for sellers while stock for sale remains relatively low.
“Increased confidence is translating into increased activity, both in the prime market and across the wider market as a whole. It is clear that the market remains largely dictated by sentiment. Our own agents are reporting that the vast majority of buyers remain unwilling to increase their budgets.
“Accordingly, our advice remains that sellers need to remain pragmatic on price, particularly given some of the uncertainty around an impending budget, the first of the new government.”
A new study suggests cash buyers secure lower sale prices than mortgaged purchasers – but is that really the case?
The survey by comparison site GetAgent looked at the average price paid by cash buyers over the last 12 months and compared it to buyers with mortgages.
The data shows that across the UK the average paid by cash buyers over the last year was £220,100 – nine per cent cheaper than the average paid by buyers with a mortgage, £240,758.
“Cash buyers are preferable to many sellers because they provide a much simpler transaction with fewer hoops to jump through and often come without a complicated chain. The flip side of this convenience is that cash buyers have a far stronger position when it comes to negotiations and often sellers will accept a more sizeable reduction for the speed and convenience of a cash sale” says GetAgent founder and chief executive Colby Short.
However, what isn’t clear from the research is whether the homes bought with cash were smaller or in less desirable locations – thus contributing to the lower price.
Downsizers, for example, typically make cash purchases of smaller homes using the proceeds from the sale of larger properties; younger buyers seek larger and dearer properties as their families grow and statistically are more likely to have mortgages.
Colby says cash has become more significant in recent years for a variety of reasons.
“Brexit uncertainty left many on the fence and so those looking to sell have had to do so with a lower price expectation due to a dwindling level of buyer interest. Therefore, finding the golden ticket of a cash buyer with honest intentions in a market slowdown has prompted an even greater tendency to sell with a greater cash discount in order to get a sale over the line” he believes.
“At the other end of the transaction scale, the continued affordability of borrowing money due to low interest rates has seen many aspirational buyers commit to a greater sum than they may have otherwise.”
In the GetAgent analysis, the gap between cash and mortgaged purchases was highest in the North East and North West, where properties bought with cash go for 12 per cent less, while London is the only region where cash will cost you more – six per cent more than the average price paid by a mortgage buyer.
A high profile and widely-respected estate agent is predicting a huge demographic change to one of the country’s wealthiest enclaves – Mayfair.
Peter Wetherell, whose agency Wetherell entered into a partnership with London chain Dexters at the end of last year, says Mayfair is about to see its largest demographic and property change of profile for 100 years.
For example, Wetherell says the area’s attraction to Middle Eastern buyers – especially interested in new-builds – is now changing as more buyers come from mainland China and Hong Kong.
In addition, Mayfair is appealing to a younger demographic, with international buyers often being Millennials or even younger. “For example a one bedroom apartment at Clarges Mayfair [was] … let last year for £30,000 per month to a young Millennial with the deal agreed in less than 24 hours” says a statement from the agency.
He says by just next year almost 50 per cent of all residents in Mayfair will be 21 to 44 and by 2030 almost one third of all residents will be Digital Natives – that is, those born since 1995.
On more everyday matters such as the state of the market now, Wetherell says the Boris Bounce has been seen even in the rarified atmosphere of Mayfair.
Following three years of political uncertainty, the average pound per square foot values for second-hand stock are now at levels comparable to the end of 2013.
Some 51 per cent of sales last year exceeded £2,000 per sq. ft. compared to 18 per cent reaching that price threshold across the rest of Prime Central London.
Wetherell predicts that sales volumes of second-hand properties could increase by up to 50% over the coming year, prompted by limited stock and pent-up demand.
Currently, up to 75 per cent of the second hand market in Mayfair is priced up to £5m with a fifth of sales last year registered above £5m.
Wetherell says that in the last decade new landmark developments offering luxury apartments and state-of-the-art residents’ amenities have achieved between £5,000 and £7,000 per square foot.
“Additionally, these new modern developments can sell at values over double that of average Mayfair prices, leading to a comparative value uplift for properties in close proximity to the new developments. Demand for these homes is set to rise as new planning policies will restrict future developments, creating a very exclusive buying opportunity” says the agency.
“Mayfair residents are increasingly younger and seeking a high-performance lifestyle, with leading developers and global brands reacting to this to further enhance Mayfair’s amenities and lifestyle offerings. Whether you are looking to buy or rent, it is clear that people want to live in Mayfair and its appeal will continue to grow this exciting decade.”
Homes selling in this short period typically get 99.4 per cent of their asking price.
Those that sell after one month achieve an a average of 98 per cent of their asking price while those which take two months to find a buyer drop to an a average 91 per cent.
Then after 12 weeks on the market a typical sale price slips to 90 per cent.
The analysis has been undertaken by the HomeOwners Alliance, using data from over 6,500 estate agent branches across Britain.
The HOA says that based on the average property price across the UK of £235,000, a 14-day sale will mean the vendor would be only £1,400 below their asking price.
However, the amount by which they fall short of their asking price increases over time and the alliance says after one month the price drop is more than £5,000 and then over £20,000 after two months on the market.
“Draw up a short list based on their track record, not their sales pitch. If you’re selling a home which has been languishing on the market speak to your agent and review the asking price. You may also want to switch estate agent to one that has a better success rate in your local market.”
The government will not announce a Mansion Tax at next month’s Budget.
It was first reported by the Sunday Telegraph a week ago, quoting two separate sources saying the idea was being considered by both the Treasury and 10 Downing Street.
On the same day Housing Secretary Robert Jenrick appeared on Sky TV and declined to rule out the possibility of a Mansion Tax.
But what a difference a week makes.
This morning’s Sunday Telegraph reports that Boris Johnson personally has vetoed the proposal.
Estate agents and Conservative politicians criticised the idea, and it has now emerged that Sajid Javid – the former Chancellor who resigned on Thursday – had been told by a senior backbench MP prior to the Cabinet reshuffle that many Tories were up in arms at the prospect of such a tax.
It is also revealed in the Telegraph that the Treasury wanted next month’s Budget to include a pledge to undertake a nationwide revaluation of homes.
This may have resulted in sharply higher council tax for many home owners.
However the newspaper understands that this, too, has been scrapped and will not be announced at the Budget.
A challenger portal says agents should reduce their reliance on the likes of Rightmove and Zoopla by using smaller rival portals as part of a wider marketing strategy for their listings.
Babek Ismayil, founder and chief executive of OneDome – a PropTech platform which runs a portal of the same name – says major portals are so strong that consumers expect to see their homes listed there.
The more content a portal displays, the more people will come and check listings – and that higher traffic allows portals to charge higher subscription fees to agents, says Ismayil.
“Portal costs for agents are also rising due to a lack of competition in the marketplace. There is a lack of new listings websites for several reasons, including agents being protective of stock which results in a high start-up cost for a new business” he continues.
“By being protective of their listings, estate agents inadvertently make it more difficult for new businesses to enter the market and compete against the larger portals.
“Instead they further empower established portals and help cement their market monopoly, which then allows those portals to charge agents more” says Ismayil.
Instead, he wants agents to use other portals to reduce what he calls “the stranglehold on agents” now held by the major sites, and to use newer marketing methods such as social media.
“The influence of social media continues to grow, with more consumers using platforms like Facebook as a place to buy and sell things and property will be no different. Agents should consider getting ahead of the curve now and advertising properties through social media while it is still a differentiator.”
He adds that agents can also benefit from focusing on improving their own websites.
“If agents’ websites had a better customer experience, consumers may start to see them as a viable route to search for properties instead of solely using the portals” concludes Ismayil.
One of Britain’s most experienced estate agents says there’s no alternative to Rightmove, and the portal’s relationship with the industry is not worse in principle than any other supplier in a strong position.
Lee Wainwright – former chief executive of Purplebricks UK and a former managing director of 116 Bairstow Eves and Mann & Co offices for Countrywide in London – admits that Rightmove has few friends at any level of the industry.
But he says the portal has won the consumer’s expectation for their property to be featured on it when it goes on sale or for rent – “there is no alternative … there is no choice” he says.
However, he dismisses suggestions that Rightmove’s relationship with agents is like that of the controlling partner in an abusive relationship.
“Was it any different in the 90s with newspapers and advertising rates? Was it any different in terms of the relationship that any supplier has ever had with any estate agent when they say they want to put their prices up?” Wainwright asks industry consultant in a video interview made available exclusively to Estate Agent Today.
Wainwright – now chief executive of floorplan and photography supplier FocalAgent – admits however that he could see why some agents feel excessive increases in charges by Rightmove do not match up with what some people believe to be the quality of the product in return.
The video is short – well under three minutes – but sheds light on what the big corporates think of Rightmove.
Boris Johnson is considering introducing a mansion tax for high value homes according to a Sunday newspaper.
The Telegraph – citing two separate but unnamed sources – says the measure is being considered as a way of helping pay for large scale infrastructure improvements, primarily in the north of England.
Both sources suggested that the PM and Chancellor Sajid Javid were looking for ways “to raise more tax from better off homeowners” and that the mansion tax had been discussed by the Treasury and Number 10.
“Some Treasury officials are understood to be keen on introducing what has been described as a ‘recurring’ wealth tax that would primarily affect London and the South East, possibly as a quid pro quo for cutting stamp duty” the paper says on its front page this morning.
Almost exactly seven years ago on February 14 2013 the then-Labour leader Ed Miliband pledged to introduce a mansion tax on high value properties: the policy was seen as contributing to Labour’s defeat at the 2015 General Election.
During the December 2019 General Election, Shadow Chancellor John McDonnell told the Financial Times that Labour would no longer advocate a mansion tax as it may be considered too radical.
Now the Telegraph is suggesting that the Johnson government is considering two options – an annual levy on high value homes along the lines of the original Miliband proposal, or an additional higher level of council tax for the most expensive properties.
No details of price thresholds or tax levels are mentioned.
“Some Tory advocates of the move point to New York, where property taxes are much higher” says the paper this morning.
“The talks [on a possible mansion tax] come as Treasury officials have privately compiled a lengthy menu of tax rises, including the proposed levy on expensive homes, capital gains, other stealth raids on business and even inheritance tax to pay for increased public spending while sticking to the Chancellor’s new fiscal rules” the article continues.
The surprising move under consideration by the Johnson government comes just a few days after it gave strong support to the stamp duty reform in 2014 introduced by then-Chancellor George Osborne.
Many estate agents and market commentators blame the Osborne reform for introducing high levy of stamp duty on expensive homes, and during his election campaign to become Conservative leader Johnson himself expressed strong reservations about stamp duty levels.
But the Treasury spokesman in the House of Lords – the Earl of Courtown – last week said: “The government has already made substantial reforms to the taxation of housing. At Autumn Statement 2014 the government reformed SDLT on residential properties, cutting the tax for 98 per cent of buyers who pay it, unless they are purchasing additional property.”
New research suggests the internet and broadband coverage have become even more important to buyers and tenants.
The study – involving 228 housing professionals and 2,000 homeowners or renters – shows that 86 per cent of the public claim having a decent connection in their property is important and 64 per said they would be put off by a home with slow Wi-Fi.
Overall 54 per cent are ‘more likely’ to purchase a property with a good connection.
Amongst property professionals 60 per cent of respondents rate ‘reliable, fast, fibre connectivity’ as critical and equivalent to being the fourth utility.
A further 32 per cent defined it as ‘a key attractor’ for buyers and renters.
A quarter of the public say they work from home on a regular basis and therefore rely on broadband.
Almost half – 47 per cent – want a decent broadband connection to keep in touch with their friends and family, and four in 10 use it for streaming TV shows and films.
Agents “dread” buyers’ questions on value, asking prices and nearby new development according to a survey.
Some 50 agents and over 1,500 owners who had purchased in the past three years were questioned by interiors firm Hillarys over their dealings with estate agents.
The questions the agents apparently dreaded most were:
– How much money has the property lost in value over the last X years? – 54%;
– Are there currently any plans for the local area that could affect us as homeowners? – 42%;
– What is the lowest price the sellers are willing to go? – 33%;
– Is the seller part of a chain and how motivated are they to sell? – 21%;
– Has anyone died in the property? – 18%
The agents also revealed some of the most unusual questions they’d been asked by prospective buyers during viewings included ‘do the pets/plants come with the house?’, ‘is there any chance that the home is haunted?’ and ‘would I be allowed to paint the house exterior?’