Conveyancing: property market update

The UK residential property market continues to go from strength to strength which is in turn supporting growth in the wider economy by fuelling consumer confidence.

According to a report published by Rightmove, the imbalance between housing demand and supply continues to grow. This is pushing up asking prices of property coming onto the market which in April stood at an all-time high of £262,594. This is 7.3% higher than a year ago and the fastest rate of growth reported since October 2007. This new average is 2.6% higher than the previous month. The trend in average asking prices is more interesting when making comparisons between the average asking prices of different types of property, see the below table.

Property
Avg asking price
Annual change
Flats/apartments
£229,755
13.3%
Terraced
£207,855
10.1%
Semi-detached
£217,832
5.9%
detached
£382,478
6.9%
 

It is believed the dramatic increase in flat and apartment asking prices is being fuelled by a surge in first-time buyers entering the market, thus driving demand in the lower end of the market, and the increases in house prices in inner city locations, of which flats and apartments make up a significant proportion.  

The local property market

In East Anglia specifically, Rightmove reports a 2.4% increase in average asking prices. These month-on-month increases in asking prices are being driven by the growing gap between supply and demand in the region. For regions in the south of the country the number of properties coming to market increased 8-13% in April compared to the same month last year but surveyors report this figure is still substantially below what is needed to fulfil demand .   

Whilst supply is limited, demand is increasing significantly due to the widespread availability of credit, competitive mortgage rates and government initiatives such as the Help to Buy scheme – which itself has helped more than 17,000 people either purchase their first home or trade upwards.

Despite growing confidence and rising house prices, the lack of supply is holding the market back in terms of transaction levels. In January (the most recent data available at the time of writing) the Land Registry recorded some 63,123 transactions, an increase of 46% compared to 43,373 in January 2013. However, this is still 19% down on transactions recorded in January 2007 which stood at 77,674.

Moving forward, in their April 2014 Residential Market Survey the Royal Institute of Chartered Surveyors (RICS) report to expect house prices to grow 6% annually over the coming 5 years.

Holmes & Hills Solicitors has a team of residential property lawyers offering specialist conveyancing services from the firm’s offices in Braintree, Halstead, Sudbury, Tiptree and Coggeshall. Click here for more information on the firm’s conveyancing services or to get a fixed-fee quote for your conveyancing.