Why January’s “Busiest Ever Month” for Property Sales Looks Set to Continue through 2020.
Two months since the General Election and the sudden flurry of property sales, albeit mostly focused at the higher priced end of the market. Potential house sellers may be asking themselves, “was it just a blip, have market prices continued to revive and is it really a good time to sell my house?”
Homeowners who put their house moving plans on hold while price growth slowed in the capital are being encouraged to take advantage of the current momentum. Latest reports from property giants, RightMove and Zoopla indicate that visitor traffic and sales were up in January 2020 compared to the same period in 2019.
Property sales in January had jumped by 12 per cent
RightMove say they had the “busiest ever month” with visitors passing 150 million for the first time – up by 7 per cent on January 2019. Zoopla recorded a slightly higher volume – 152 million visits – their busiest month since May 2019.
Importantly, for potential house sellers, RightMove also reported that “agreed” property sales in January had jumped by 12 per cent on the previous year. While the average number of sales climbed to 12 per cent across the UK, not unexpectedly, London saw the “biggest uplift” at 26 per cent followed by east England (20 per cent) and the south east (19 per cent).
Considerable boost in local areas
Clearly, it was not only within the higher price range of the residential market that saw instantly active house hunters. The RightMove and Zoopla figures also reflect reports from a wide number of agents who said sales and valuations had received a considerable boost in their “local areas”.
Turning to Redbridge borough, the average asking price in January 2020 was £437,383. However, the average price of a detached property was £994,254, compared to £925,810 one year earlier – up by 7 per cent. Likewise, those selling a semi-detached house were asking for £525,050 at the start of the year compared to £500,205 in January 2019 – a rise of 5 per cent. There was also a modest rise (1 per cent) in the asking price of £427,497 for a terrace house in January from £425,195 during the same period in 2019.
Gap between growing house demand and lack of supply
Property agents point to potential house movers of another compelling reason why the current surge in house buying may not be a temporary blip. The ever-widening gap between growing house demand and lack of supply, and the impact on maintaining selling prices.
While house purchasing has seen a welcome rise for those waiting patiently with existing properties on the market, the same cannot be said for new listings. RightMove say that in the second half of January, new instructions had dropped by nearly 9,000 on the same period in the previous year, a trend that Zoopla has also separately reported as a fall in new listings during the first four weeks of 2020.
Sellers advised to still be realistic when setting their asking price
This would suggest that a significant number of potential house movers appear not to be persuaded by the current property purchasing upswing. The gap between demand and supply is likely to be viewed as not shortening any time soon, as reflected in sustained selling prices. It may well be that potential house movers are looking towards the Spring – the traditional start of the house selling season – to list their house on the market.
However, sellers are cautiously advised to still be realistic when setting their asking price. Even though mortgage interest rates continue to stay reasonably low and buyers are more confident in making a higher offer, mortgage providers still place a limit on the amount a buyer can borrow. No one should need reminding that property price values and affordability can also vary significantly from area to area.