Why selling now might be a good idea before the housing market cools down Yorkshire News

The supply of new homes for sale continues to rise as pandemic-driven reasons to move provide momentum and some sellers look to take advantage of home price gains over the past two years, according to the latest Home Price Index. from Zoopla.

Portal researchers believe this is likely to continue in the coming months as price growth and high demand trigger further moves. However, the increase in new supply has not been enough to compensate for the high levels of activity, so total stock levels remain limited, which has continued to put upward pressure on prices. As a result, UK price growth over the past year rose from 11.8% in Wales to 3.2% in London. Yorkshire saw an increase of 8.7%, the North West saw an increase of 9.4% and the North East 7.5%.

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According to the Zoopla City Index, Liverpool led the annual price growth with 10.3%. It is followed by Nottingham, which registers an annual growth of 9.5%. Leeds saw a gain of 8.5% and Sheffield 8.7%. This contrasts with a -0.2% annual price drop in Aberdeen since February last year, and a -13.5% drop over five years.

House prices appear to cool off later in the year

Affordability levels are a key factor in the spread of price growth across the country. The highest price growth has been recorded in markets with higher demand and lower average prices. The median home price in Wales is £186,200, compared to the UK median of £245,200. Changes in labor practices in the wake of the pandemic, as well as local economic conditions and property types are also factors at play in the range of value growth seen across the country.

In London, the average house price is almost 11 times the average income. This compares with the North of England, where the median house price is 5.1 times the median wage. This helps explain current trends in price growth, with Wales being one of the most affordable markets, even with price growth in recent years. Modest price growth in London means affordability levels have improved in the capital, but remain well above the rest of the country.

Zoopla says that another consideration for many buyers when it comes to affordability is the cost of mortgage financing. Mortgage rates have already started to rise after the Bank of England’s recent base rate hike to 0.75% and independent economic forecasters expect at least another 0.25% rate hike this year.

This will increase the cost of borrowing, creating some demand among buyers eager to lock in a mortgage rate now. At the same time, there is a growing debate among policymakers about relaxing stress-testing rules for lenders and for new borrowers, which could make it easier for potential buyers to access financing, especially as the cost of living increases.

Increased pressure on household finances, as well as geopolitical uncertainty due to the tragic events in Ukraine, will act as a drag on buyer demand during the year. This will start to ease the upward pressure on prices, although continued supply constraints will put a floor on prices. All of these factors indicate that potential sellers currently have a ‘window’ of strong demand from buyers, especially those selling single family homes.

Demand has slightly decreased since the beginning of the year, but it is still unusually high and 65% higher than the average level of demand recorded in the last five years. There are two factors driving demand today. First is the continued demand for single-family homes, with demand for three-bedroom homes more than double what is usual for this time of year.

The second factor is a continued strengthening of demand in some key UK cities. Since January, demand is up 5% in Birmingham and 7% in Newcastle, while buyer demand is up 20% in Blackpool and 19% in Swindon since the start of the year. This trend has been reflected in the rental market, with the opening of cities leading to an increase in demand.

However, at the same time, demand in semi-rural and rural markets also remains strong in most markets. This demand has translated into high levels of activity in the first quarter of the year. While agreed sales are not as high as in the first quarter of 2021, when many deals were being agreed by those hoping to benefit from stamp duty, contract sales in 2022 so far are more than 30% higher than in the first quarter of 2020. In London, sales agreed so far this year have exceeded those of the first quarter of last year, highlighting the demand in urban areas.

The magnitude of the demand means that the pace of market activity has been maintained during the first quarter of this year. For homes that sell within six months, the average time between listing and sales agreement is 29 days, well below the time to sell even early last year.

The current window of strong buyer demand will lead to higher levels of activity in the short term. However, we expect economic headwinds, including the rising cost of…

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This notice was published: 2022-03-28 23:01:14

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