Britain’s housing market is at its strongest for six years.
According to HMRC, there were almost 90,000 UK residential property transactions in August, just 0.4% up on July, but 19.2% up on August last year. The number of non-seasonally adjusted transactions was just over 100,000 and the highest since December 2009. However, despite the optimism in the press and signs of confidence in the residential property market rippling from London, the person in the street still needs convincing that their financial position is improving.
So far this year, the central London property market has continued to out perform other regions. Demand for property continues to outstrip supply, leading to prices rising at a level not seen since May 2007. Prime Central London has seen record prices achieved over the last year, but the greatest growth has been in the surrounding areas as people move from Prime Central London. For example values are up by as much as 32% in Battersea. It is a cash-driven phenomenon with little evidence of a debt fuelled boom and unrelated to the Help to Buy or Funding for Lending schemes. The investment from overseas is also contributing to an increase in demand but the main driver is supply; approximately 33% down on 12 months ago. This imbalance is creating an upward price spiral and whilst new developments are being launched, they are being sold ‘off plan’ quickly to both UK and overseas purchasers and are not sufficient to quench the demand.
Since the credit crunch fewer Londoners have wanted to sell their ever-increasing asset and invest in the weaker country property market. Of those who have moved out, many have rented out their London property and rented in the country.
As the economic confidence grows, we are seeing more homeowners looking to buy outside London and wanting to take advantage of the price differential between the capital and the country. This is probably at its widest gap, with the average London price 28% above the peak and the average country property 12% below. Some of these enquiries are from buyers, frustrated with the lack of choice and being out bid by overseas money believe that now is an opportune time to move. These buyers are conscious that even with a slow improving economy they are not willing to offer over the market value, despite the over inflated expectations of some vendors.
From much of Surrey it’s so easy to hop on a train be back in London Waterloo in about 30 minutes, it’s easy to see why this area is proving to be a popular location for London buyers. In places, prices are currently about 10-15% above the ‘peak’ of the market in 2007 and still increasing - so buyers can feel safe that any property investments they make in this area will continue to grow in the future. The property market is moving extremely quickly, with many London buyers moving into rented accommodation in the area ahead of time, in order to be quickly available for viewings when new properties come to the market. Our advice is to register your requirements with us as soon as you can, being prepared early will stand you in the best stead of getting the property you really want.
If you are selling a property in Surrey, contact us for an up to date valuation.
Curchods Estate Agents