Find out what’s happening in the residential sector
With soaring temperatures, will house prices continue to rise or is the economic climate set to bring the market back to a simmer? Alan Williams and Michelle Reedie provide commentary on what’s happening in the residential sales and lettings market.
Nationally, asking prices hit a record high for the sixth month in a row, rising 0.4%, which is also the case in the East of England, where the average house price in our region is now £428,567, a rise of 9.1% compared to last year*. A low amount of stock is driving up prices and buyer demand is now 26% higher than at the same time in 2019, making now a great time to sell with a good chance of achieving the best price.
Alan Williams, Head of Residential Sales comments “We are not surprised that East Anglia has seen such price growth given the post-Covid shift in working arrangements and people looking to relocate to our region. In the past six months, buyer demand has resulted in serious competition for some properties, often resulting in a purchase price that has significantly exceeded the original guide figure. This summer, however, we are seeing a re-balancing as the market returns to ‘normal.’ It was never going to be the case that the enormous spike of transaction volumes we saw in 2020/2021, driven by post-Covid demand and the Stamp Duty deadlines, would be maintained and the property market has always reflected cycles of demand.
Our branches in Essex and Suffolk are, therefore, carefully advising clients on how to adapt to a summer market, where the buyer pool is more selective and less driven by deadlines. Although long term buyer demand for our region is undiminished, we are advising sellers to seek the best advice on pricing and marketing strategy because we are entering a part of the cycle which is suggestive of a trend to more of a buyers’ market. Fewer properties have been coming on to the market this spring and summer, however, so despite rising interest rates and cost of living increases, we expect house prices to remain broadly stable in the next six months. In the autumn we would expect an uptick in demand as well as the supply of new properties to the market which would follow a long-established seasonal trend.”
According to the Index of Private Housing Rental Prices, from the Office for National Statistics, in the twelve months to June 2022, the East of England saw the third biggest increase in rents at 4%, following the East Midlands at 4.3% and the South West at 4.1%.
In June, the Government announced a new Rental Reform Bill for England, which aims to protect private tenants and ensure access to safe and secure living accommodation. Although the proposed measures could take some time to be passed through parliament, the aim is to standardise rental conditions and protect those who currently live in unfit homes.
Michelle Reedie, Head of Lettings, commented “The rental market shows no signs of cooling down and in the past six months we have seen high demand from tenants and an increase in stock levels, meaning the volume of tenancies is up significantly compared to the same period last year.
*Data from Rightmove House Price Index