The desire to move remains on the agenda for many, with little sign at the moment that economic headwinds are impacting the property barometer dial. This is according to Member of The Guild of Property Professionals, Adam Mackay from Mackay Property in Sawbridgeworth, who says: “So far, 2022 has started strongly. According to HMRC, sales volumes in January were predicted to be 10% higher than the long- term average recorded between 2012 and 2021, and except for a year ago, are the strongest since 2007. Buyer demand remains steadfast and is up 16% year-on-year. Added to that, property price growth continues to be sustained with Nationwide reporting that the annual price growth in the year to January was at its strongest in over 15 years. Rightmove reported the biggest monthly jump in the asking price of a newly- listed property since 1994 and when asked, the majority of agents are still expecting price growth over the next three- and 12-month period.”
Looking specifically at the regional markets, at 10.8% annual property price growth in Sawbridgeworth and Bishop's Stortford is considerably stronger than evident a year ago. The pandemic ‘search for space’ is still playing out in many markets, with prices for detached homes currently seeing the strongest growth of all property types; average prices are up by more than 15% year-on-year.
Central Bedfordshire and East Hertsfordshire proved the fastest-moving market in Hertfordshire, Bedfordshire and Cambridgeshire over the course of 2021, with an estimated one in every twenty privately-owned properties estimated to have changed hands. 2022 has started with momentum. At 39 days, the average time taken to sell a property is 3 weeks quicker than a year ago.
Adam Mackay continues that although the quantity of property for sale remains low, with the Royal Institute of Chartered Surveyors reporting, barring the market closure in 2020, stock levels per agent are at a record low in January, there are signs of change. “New listings in January rose 11% year-on-year, with Rightmove noting a substantial rise in home valuation requests; an indication that many are looking to sell before they buy in current conditions. These should feed through to agents’ books over the coming months. Historically, March is the strongest time to sell, with the highest number of buyer enquiries per property for sale,” he adds.
He notes that across the UK, governments are announcing their plans for ‘living with Covid’ and hybrid working is bedding. With economic growth of 7.5% over the course of 2021, the UK economy is close to its pre-pandemic level. However, consumer confidence remains on edge due to the rising cost of living. Increases in the cost of food and clothing, along with rising fuel and energy prices look set to squeeze many household incomes. Savings made during the pandemic may well prove a cushion in the short term and while interest rates may well rise from the current 0.75%, they remain low by historic standards.
“An estimated 68%, have a mortgage to pay on their property. Therefore, any rise in the base rate of interest is a cause for concern,” says Adam Mackay. “However, with nearly three-quarters of homeowners currently on a fixed-rate deal, and 94% of new loans being issued on this basis, many are protected in the short term. Also, the base rate of interest in the UK has been 1% or lower since February 2009, although experts predict the rate will rise back to 1% by the summer in a bid to curb the rising cost of living. This remains low by historical standards, with mortgages taken out since April 2014 stress-tested to a 6% interest rate.”
In conclusion, Adam Mackay notes that demand for rental property has also hit a record level. At +64, the net balance of contributors to the RICS survey reported an increase in January. Tenant demand is at its highest-ever recorded level, with Rightmove reporting renter demand is 17% higher than in January 2021, and up 33% compared to January 2020. Like the sales market, a shortage of property to let is underpinning prices, leading to rises in average rental values in all areas of the UK. However, according to a Property Academy survey, many landlords are keen to keep existing renters: 76% would maintain a rent level if they were happy with the existing renter.
Read more in the market report on our website here, or contact us on 01279 600 567 / hello@mackayproperty.co.uk
