For the last two or three months, news that property prices are
beginning to take an upward trend has reached our ears. So, has the
market ‘bottomed-out’, or is there still some way to go before
stability truly returns?
In this article, we take a look at figures and predictions from
leading sources in the property industry and wider economy to assess
the state of play.
Scores on the doors
New buyer enquiries have risen for the eighth month in a row,
and newly agreed sales have risen sharply, according to the latest
survey by the Royal Institute of Chartered Surveyors (RICS). The survey
shows that, while sales are rising, they are still very small in
number with sales per surveyor averaging at around 1 a week.
Let’s take a look through the estate agent’s window. The National
Association of Estate Agents found that the average estate agent made
strong sales in June, despite having slightly fewer properties
available for sale than in May.
Property website Rightmove has reported this month that the average
asking price of a home has risen to £227,864. This is the fifth such
rise in six months and coincides with a 20% increase in the number of
houses for sale on the Rightmove website. The average asking price of a
flat has risen the least, up only 0.6% to £182,800.
According to mortgage lender Halifax, the property market is, and
will remain, volatile this year. Despite reporting that house prices
rose by 2.6% in May compared with the previous month, the lender says
that prices fell again by 0.5% in June. The Nationwide, however, saw a
0.9% rise in June, and the mutual’s take on house prices is that the
current average is £156,442.
The property tracker survey carried out by the Building Societies
Association in June pointed to cautious optimism with a 1.4% rise in
house prices expected over the next year by survey respondents.
The bleakest view of the property market has come from
Pricewaterhouse Coopers, which warns that news of house price rises
could be a ‘false dawn’. The consultancy firm predicts that prices will
fall by a further 5-10% next year, will be flat in 2011 and could then
take until 2020 to return to their pre-crash peak.
If house prices are beginning to stabilise, consumer spending remains
low and the lack of availability of jobs is not improving either. The
latest Manpower employment outlook survey shows that hiring intentions
for the third quarter of
this year remain at a low last seen in the early nineties. 10% of
employers questioned predict a decrease in headcount with over 80%
expecting no change.
In retail, the picture is improving slightly, with the British
Retail Consortium reporting that like-for-like sales rose by 1.4% in
June compared with the previous year. The warm weather and clearance
sales appear to have boosted clothing and outdoor leisure, though, as
furniture and homewares sales remain difficult.
Property prices remain well below their August 2007 peak and it
could be that it takes some time for these values to be regained. The
picture is also mixed across the country, with Northern Ireland, Wales
and the North East faring far worse than London and the South West.
If you’re a would-be first time buyer, it could be a good time to
start house hunting but the jobs and retail figures show that the UK
economy is far from out of the woods. With the predictions on house
prices ranging from modest increases over the next year to a fall of a
few percentage points, there may not be a need to rush into a purchase.
If you work in education and you’re considering buying a
property, find out how much you may be able to borrow with our new
online personal assessment:
- RICS Housing Market Survey June 2009
- Halifax House Price Index June 2009
- Nationwide House Prices Press Release July 2009
- National Association of Estate Agents, press release July 2009
- PricewaterhouseCoopers housing market news release 14/07/09
- Manpower Employment Outlook Survey Q3 2009
- British Retail Consortium Retail Sales Monitor June 2009
- Building Societies Association – Homebuyer Confidence Increases Press Release June 2009