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Loo Rolls And Other Flying Objects

As we head for autumn and further Covid restrictions, Alison Richards of West Wales Properties assesses the state of the property market.

So many people are asking us about the property market at the moment. To provide some perspective, we often answer the question with a question. We ask, “Do you remember back in March, how loo rolls became difficult to find as they were flying off supermarket shelves?”

“It would be hard to forget,” most people reply.

So we say, “That’s what’s happened to property: houses are flying off our books.”

While the country was in lockdown, no one could envision what would happen to the property market next – including us. We couldn’t predict the strength of public demand for changes in surroundings and lifestyle. We couldn’t know how people would react to isolation, sudden changes in working practices and the resulting opportunity to commute less often but therefore further – providing the chance to buy a larger suburban or rural house and garden.

Now, after several months of the most extraordinary market most of us can remember, we have experienced the combined effects of the Covid and Brexit bounces, the relaxation of stamp duty and low-interest rates.

Many first and second-time buyers and sellers won’t remember the days when the market was on fire like this; when there were multiple offers on houses for sale, prices were spiralling upwards, and property was selling almost as soon as it came on to the market.

But we remember those days. We remember them very well. That is why we are highly experienced and skilled in dealing with this unexpectedly buoyant market.

For those thinking of buying before the end of the stamp duty reprieve, we recommend doing so now. Why? Because neither we nor anyone else, including the Chancellor, knows what’s going to happen next. Another national lockdown – if there were to be one – might only temporarily suppress this strong market and drive even more people to want to move. But big questions remain about the market in 2021.

High unemployment, a negative Brexit trade deal, tighter mortgage criteria and the end of the stamp duty relaxation, could turn off the tap that was so dramatically turned on in July.

Only time will tell. But in the meantime what we do know is that property is flying and we are here to help buyers and sellers fly with it.

Crisis? What crisis? Mortgage lending hits 13 year high

Mortgage approvals for house purchases have soared to a 13 year high according to Bank of England figures up to the end of August.

There was a rise from 66,300 in July to 84,700.

However, the year-to-date total is still suffering from the market closure during the spring lockdown: the BoE says there have been, in total, 418,000 approvals so far in 2020 compared to 524,000 in the same period in 2019.

In terms of remortgaging, there was no significant change from July but figures are 36 per cent lower than in February.

Jeremy Leaf, north London estate agent and a former chairman of the RICS residential faculty, says the August figures show the impact of the stamp duty holiday having “transformed the market which had been in the doldrums post-Covid”.

He says there are “a few signs of that upsurge running out of steam” following concerns over the spread of Coronavirus in recent weeks and the threat of further restrictions on the population.

Leaf warns that price rises will remain subdued as supply is now matching demand and buyers who are worried about the immediate future are wary of accepting over-ambitious prices.

Meanwhile another London agent – Marc von Grundherr, director of Benham and Reeves – says: “We’ve seen little to no let-up in the volume of homebuyers hitting the market despite a tightening of finance options available. Where they may have been traditionally buying with a 15 to 20 per cent deposit, they’re now stretching to as much as 30 per cent. 

“They are doing so to not only to take advantage of the favourable rates currently on offer but to secure a stamp duty saving in the process. Since the stamp duty holiday was announced, the number of mortgage approvals seen on a monthly basis has more than doubled, and so the boost it has given the market cannot be underestimated.”

And Hina Bhudia, a partner at Knight Frank Finance, adds: “The pandemic has completely upended what is usually the one of the quietest months of the year for the property market. Interest rates remain ultra-low and the cheap cost of debt is driving a significant amount of this activity.

“Most of the activity we’re seeing is at sub 75 per cent loan to value and the lenders all want a bigger slice of that market. That means the choice of products for borrowers at that level is growing every day.

“The surge in transactions at that level also means turnaround times between submitting an application and getting approval varies hugely from lender to lender so borrowers should check carefully before proceeding.” 

Alison Richards of West Wales Properties has some thoughts for property buyers and sellers who wish they could see into the future

Don’t you wish that just once you could have a sure fire tip about the perfect time to buy and/or sell an investment?

If only you or your parents had known to invest in a small Californian computer start up company called Apple in 1976. An £800 investment then would be worth over £30 billion today.

Finding these tips and then acting on them is the stuff of legends. But it is still possible to do the right thing at the right time by listening to the right people.

For example, a good estate agent with great local knowledge knows exactly what is happening in the property market. So, if you are thinking of buying or selling your home, a good first move would be to get the best local advice.

And what would we, at West Wales Properties, say if you asked us about the market right now? We would say that, following lockdown, we have not seen as buoyant or active a market as this since before the great recession in 2007/8. We would tell you that properly priced property is flying off the shelves. But we would also tell you that the property market is cyclical, and that sometime after this scramble to buy and sell is over, the market will eventually cool – it always does. It cannot stay like this forever.

Finally, we will tell you that now is as near perfect a time to buy and/or sell a property as you are likely to find, and that periods like this only come round every ten years or so. Plus, this time, there is Stamp Duty relief for many home buyers, and the lowest mortgage interest rates in history.

You’ll be pleased to know that we don’t charge for insightful property advice, and while we might not be able to turn £800 into £30 billion for you, we can help you make the most of what is probably your most financially valuable asset.

So, go on, make a legendary move ……………

Boom! 13-year high for number of sales agreed per agency branch

If yet more proof were needed of the housing boom this summer, NAEA Propertymark says its sales agreed data suggests a 13 year high for the market.

The average number of sales agreed per estate agent branch stood at 13 in July – the latest data available – following the announcement of a stamp duty holiday.

This is the highest figure recorded since June 2007 when 13 sales were also recorded per member branch.

Year-on-year, the number of sales per branch has increased by 44 per cent, rising from nine recorded in July 2019.

In July, eight per cent of properties sold for more than the original asking price, a fall from 10 per cent in June. However, three in five properties sold for less than the original asking price.

In terms of demand in July, the number of house hunters registered per estate agent branch rose by 13 per cent, increasing from 379 in June to 428.

Year-on-year, housing demand is up by a third, from 316 in July 2019.

Looking at supply, the number of properties available per member branch stood at 43 in July, increasing from 37 in June. Year-on-year, the supply of housing increased marginally from 41 properties per member branch in July 2019. 

The number of sales made to first time buyers stood at 25 per cent in July, a fall from 29 per cent in June.

“It’s positive to see the market continuing to boom with clear interest from both buyers and sellers. With the recent stamp duty holiday announcement, we expect the housing market to remain busy throughout the rest of the summer” says NAEA Propertymark chief executive Mark Hayward.


Houses selling much faster than flats according to Zoopla data

Figures from Zoopla quantify how Coronavirus is changing the market, with houses selling significantly faster than flats.

The latest market report from the portal states: “Quarantine has galvanised many homeowners and renters into reconsidering their housing requirements, resulting in demand for more space and changing work and commuting patterns.”

It says three-bedroom houses remain the fastest selling property on the market, with an average time of 24 days since the lockdown lifted.

However, this property type also exemplifies the supply/demand imbalance – while three bed houses are the most in-demand property type, the proportion of available supply falls short of demand across all parts of the UK.

Zoopla also reports that four and five-bed houses are selling 33 per cent faster than in 2019, as buyers prioritise more space and widen their search criteria – migrating away from the more expensive cities, suburbs and commuter belts while enabling their budgets to stretch further. 

Meanwhile, flats are taking the longest time to sell at an average 32 days – although this still remains relatively quick, because of the frenzy of activity in the market.

In Zoopla’s latest monthly snapshot, demand continues to run ahead of supply, sustaining annual house price growth at 2.5 per cent.

Time to sell since the market reopened has decreased by 31 per cent across the UK, averaging just 27 days in the period since lockdown, compared to 39 days over the same period in 2019.

More homes are coming to market in wealthier demographics post lockdown with wealthier sellers less likely to be affected by recession.

However, while the market sets new highs, buyer interest has softened 17 per cent over past month, as the holiday season distracts purchasers. Even so, demand remains 78 per cent above last year.

Zoopla anticipates that market conditions are expected to remain stronger than last year for the rest of 2020 with house prices up between two and three percentage points by Christmas.

“The next important milestone for the housing market comes in September when schools reopen and the UK starts to get back towards a full reopening of the economy” explains Richard Donnell, Zoopla’s research and insight director. 

“The ‘once in a lifetime’ re-evaluation of housing requirements on the back of the lockdown will be a counterweight to the impact of the recession on housing market activity over the rest of 2020. While demand has softened over August, we expect the current momentum in market activity to continue into 2020 Q4” he adds.

‘This time it’s different:’ Zoopla predicts recession won’t cause ‘major decline’ in house prices

Zoopla is hoping pre-existing slower house price growth and tougher mortgage regulations will mean this recession is different to the past.

Analysis by the portal said it does not foresee a major decline in UK house prices as a result of the recession.

It said this was because price growth is already low, mortgage lending criteria has been tightened since the financial crisis and unemployment may be concentrated among younger age bands who rent rather than own a property.

Zoopla’s figures shows properties are selling faster, with the number of days to reach the sold subject to contract phase in the past three months hitting 27 days compared with 39 last year.

Three-bedroom houses remain the fastest selling property on the market, with an average time to sell of 24 days since the lockdown lifted, Zoopla said.

The flow of new supply is running 54% ahead of this time last year, but overall stock per agent remains 3% lower, the portal’s research found.

Zoopla said average UK annual house price growth was 2.5% in July at £253,600.

Richard Donnell, research and insight director of Zoopla, predicted average house prices would end this year up 2% to 3%.

He said: “Housing market conditions remain unseasonably strong despite the UK moving into recession.

“Demand continues to outpace supply and support house price growth of 2.5% per annum.

“Meanwhile, houses are selling faster than flats as we see a shift in buyer priorities in the wake of the lockdown and movers prioritise more space.

“While the economy has contracted sharply and unemployment is rising, consumer spending has rebounded and purchasing manager indices are pointing to a wider rebound in the economy.

“This is positive but the unwinding of the furlough scheme and other Government support is the next challenge that will test the strength of economic recovery.

“In the short term we still believe that house prices will end the year 2% to 3% higher than at the start.”


Busiest month for ten years as home-buying supersedes summer holidays

Rightmove says that the rulebook has been rewritten as the post-lockdown mini-boom accelerates rather than slows down.

There is normally a seasonal slowdown in housing market activity over the summer months, as both buyers and sellers turn their attention to summer holidays.

But this year, home movers have put more property on the market and have agreed more sales than in any month for over ten years, worth a record total of over £37 billion.

This is leading to monthly price increases in ten out of twelve regions, with a record high in new seller asking prices in seven of those regions.

Prices usually fall at this time of year, as sellers try to tempt holiday distracted buyers, with the national average monthly fall for the last ten years being 1.2%.

Miles Shipside, Rightmove director and housing market analyst said:

“There have been many changes as a result of the unprecedented pandemic, and these include a rewriting of the previously predictable seasonal rulebook for housing market activity and prices. Rather than just a release of existing pent-up demand due to the suspension of the housing market during lockdown, there’s an added layer of additional demand due to people’s changed housing priorities after the experience of lockdown.”

“The number of monthly sales agreed is the highest that we have ever measured since we started tracking this figure ten years ago, up by 38% on the prior year, and a massive 20% higher than the previous record set in March 2017.

“The increase in activity is not just a result of the stamp duty holiday, as sales agreed are up across all sectors of the market. They’re up 29% in the first-time buyer sector, 38% in the second stepper sector and 59% for larger, top of the ladder homes.

“Momentum is still building, with the latest weekly figure for the number of sales agreed having shot up by 60% compared to the same week a year ago.

“As part of the virtuous home moving circle, home-owners are bringing more properties to market than in any month since 2008, giving more choice to buyers.

“There are 44% more properties coming to market compared to the same period a year ago, though there are considerable regional variations.”

Record levels of pent-up and new buyer demand mean that there is extra pressure on the lending and legal areas of the home moving process.

The average time between agreeing a sale and moving in was already around three months before lockdown and now there is a ten-year high in the number of sales being agreed.

Mortgage lenders and conveyancers may struggle to cope with the increased workload, not only now but as pressure rises further in the run up to the 31st March stamp duty holiday deadline.

Booming Marvellous

As we head for late summer Alison Richards of West Wales Properties assesses the property market.

Covid19 hasn’t been the only outbreak this year. There has also been an outbreak of property sales and letting since the end of national lockdown. The press has called this current property market a mini boom. We call it a maxi boom.

Mini booms occur when there is above average activity. Maxi booms happen when buyers are queueing up, there are multiple offers for most properties on the market, and deals regularly go to best and final offers only to exceed the original guide prices. This is what we are currently experiencing.

Nor has the lettings sector been left out of this market frenzy. There is enormous demand for rental properties.

Since the general lockdown ended our phones have been practically ringing off the hook and the numbers of visitors to our website and social media pages have skyrocketed.

Many things have changed since the pandemic hit our lives. One of these changes is in the attitude many of us have to how and where we live. A demand for more spacious and environmentally healthy living is driving the market, spurred on by a temporary reduction in stamp duty that has not only helped many second and third step buyers, but also has galvanised holiday home and buy-to-let purchasers.

Another change this summer is the government’s avowed intent to simplify and speed up the planning process. The current system has been described as “complex and slow” by the housing minister. It is a view hard to argue against.

But shouldn’t the minister also be looking at the current snail-pace of the conveyancing process? This is causing completion delays of up to six months in some parts of the country. How can buyers and sellers plan properly with this much uncertainty? It is a lamentable situation in this digital age, and one worthy of any government’s urgent attention.

As we head into late summer amidst all these changes our phones are still ringing and there is no let up in demand. We don’t know how long this surge in demand for property will last, but for buyers and sellers right now it is a boom market. So our advice is; to change your room use this boom.

Welsh Housing market to re-open fully from Monday 27 July 2020

Today, 24 July, the Welsh Government confirmed that the housing market will fully reopen on Monday 27 July 2020.

This announcement means the housing market is fully operational again to include viewings of occupied properties. As a result, viewings can now take place to see a property more than once as well as visits to empty rooms in occupied HMOs or shared accommodation.

Some key things to consider:

  • All viewings should be by appointment only
  • We advise agents to not book back to back visits to a property
  • We advise occupiers to wait outside the property when the viewing takes place
  • Property viewers should be advised against touching surfaces throughout the property viewing
  • Keep the amount of time at a viewing to a minimum

It is also important that initial viewings are done virtually, and viewings of occupied property only take place with proceedable parties of serious intent.

In a press release earlier today, First Minister Mark Drakeford said, “Thanks to the efforts we have all made to reduce the spread of the virus, we are taking further steps to re-open more of Wales” and “Coronavirus has not gone away. But if we all work together, we can keep Wales safe.”

As the UK lifts out of lockdown, Alison Richards of West Wales Properties suggests a chat over coffee to consider your next move.

The creator of Thomas the Tank Engine, the Reverend W Awdry, once said that the church was like a railway: both were trying to get people from one place to another.

Estate agents fall into the same category. We move people from one home to the next. And never has moving people seemed more important than now: because never have homes seemed more important to all of us as we battle to defeat the most deadly threat in our lives – and to our way of life – since World War II.

But something big is going on with homes. Our activity has gone through the roof in the past few weeks. The property portals are reporting the highest traffic to their sites – ever. In lockdown decisions to change – to move on – have been made and are now being acted upon.

It is at a time like this that estate agents become very useful indeed. It is their local expertise and market knowledge, which are so invaluable to sellers and buyers. Who’d have thought that houses and flats on dedicated cycle lanes would step up in value in only a few months? The answer is, an experienced estate agent.

So if you plan to move home, why not call us for a chat. Better still, arrange a Zoom meeting, Face Time or WhatsApp chat over a cup of coffee. You will find that we live in your area, we share and enjoy the same local facilities and we support the same local enterprises. More than that, you will find that we care in a way that goes beyond selling your property. We take care in moving our clients from one place to another.

Estate agents are engines of change. As James and Percy said to Thomas the Tank Engine, “We’re really useful engines, after all”.