House prices could rise by 4.5%
Monday 24 February, 2020
Thomas Wheatley, Mortgage Broker & Protection Adviser in Tottenham, North London reviews why people have delayed moving to a new house but why indicators are now suggesting property activity is picking up.
Why have people delayed purchasing a new home?
Over the last few years, especially since the Brexit referendum, due to the stagnant house prices many people have decided to try and extend their home or make do rather than move to a new property. This made sense as subdued property price growth was generally outweighed by the costs of moving. These costs included estate agent fees, stamp duty and general moving costs.
The Royal Institution of Chartered Surveyors has seen an increase in property activity in 2020
The Royal Institution of Chartered Surveyors has asked valuers about their opinion on the housing market and the overriding conclusion is that at a national level there is more activity. In January 2020 the RICS reported a higher number of property valuations compared to January 2019. In January 2020 the national price net balance was positive rising to +17%. This is the first time the price net balance has been positive since July 2018 and means that 17% more surveyors noted an increase in prices rather than a fall. For the first time in several years house price rises were noted in the south east and London as more surveyors reported price increases than decreases.
As the demand for rentals increases rents could rise during 2020
According to The Royal Institution of Chartered Surveyors the demand for rentals has increased in the three months to January 2020. A net balance of +24% of respondents noted an increase. However, landlord instructions fell for the fifteenth successive quarter. As demand for rentals increases and the supply of rentals falls this could mean rents will gradually rise. Respondents believe that rents could rise over 2% in the coming year.
Thomas Oliver work with first-time buyers to help them purchase their first home
For anyone who is considering purchasing their first home a rise in rents may encourage them to purchase a property. Our Thomas Oliver mortgage broking team work with many first-time buyers and help them secure their first home. As first-time buyers do not have a property to sell, they are often in a better position to get their purchase offer accepted.
‘If surveyors are noting an increase in property activity, we would anticipate that this could feed through into a real growth in property prices. This is mainly caused by people who have put their plans to move on hold who are beginning to review property again. People finally have increased certainty because of the election result, and this ends the period of uncertainty we experienced since the referendum. As people are now looking to move again, there has been a rise in the amount of homes placed on the market, an increase in property enquiries and an increase in agreed sales in January 2020. Once the actual sales start to go through around April 2020, Reallymoving are forecasting that we could see a rise in house prices of close to 4.5%, which hasn’t happened since before the referendum.’
Thomas Wheatley, Mortgage Broker & Protection Adviser in Tottenham, North London said:
‘With the optimism around the property market increasing since the election result, now might be a good time to consider moving and selling your own home. Thomas Oliver’s mortgage brokers offer mortgage advice and can support you whether you are a first-time buyer, a home mover or you are looking to purchase a buy to let investment. We recommend you look at your finances before you go house hunting. We can review your income and expenses and work with you to decide how much you can borrow from the lender. We offer a free initial mortgage consultation so call us now on 01707 872000 to arrange a meeting with a qualified mortgage broker. In our mortgage advice meeting we will review our mortgage process with you so that you know exactly what will happen and we will work with you in order to ascertain how much you can borrow. Once you have this figure you are then in a position to have your house valued as these two pieces of information allow you to work out how much you can borrow and the type of property you can afford to purchase.
If you have delayed moving in the last few years and want to purchase a new home in 2020 please call the Thomas Oliver mortgage broking team now. We are experienced mortgage brokers and can offer you mortgage advice on a variety of mortgage products to suit your individual financial circumstances.