Housing market data released for August is likely to have confused both buyers and sellers alike, many of whom may be considering their autumn moving plans and trying to better understand the market. Whilst we have come to expect differing data from the major price indices, August was truly a month of contrasting views, with research from two of the prominent indices reporting a 3.7% difference in opinion as to which direction the market is heading.
Nationwide led with positive news, reporting a considerable monthly house price increase of 1.3%; the highest rise since January 2010, as seen in the graph below.
By contrast, Rightmove reported that asking prices had fallen by an average of 2.4% during the month. Both Halifax and Hometrack reported a fall in prices, but only of 0.4% and 0.1% respectively.
Nationwide’s ‘Dead Cat Bounce’
When releasing their data Nationwide were quick to point out that no-one should rely too heavily on one month’s data in order to judge overall market trends, but stand by their findings. However, in Garrington’s view, the recorded price jump seen in August is very much a ‘blip’ and casts some doubts as to how much Nationwide’s data can be relied upon, given the restricted sample data size and the fact that a growing number of purchases are not now being funded by credit.
Across our operating regions Garrington has seen a significant number of properties being reduced in price over the summer months or which have come off the market, ready to be re-launched in the autumn.
Olympic feel good factor
Whilst the weather during August did not bring bright sunshine, the Olympics certainly shone with gold. The Olympics drew a lot of global attention to London and the UK. Across the country ‘Olympic fever’ truly swept the nation and provided a much needed distraction from the heavily reported economic gloom.
In what is traditionally a quieter month, Garrington was surprised but pleased to have experienced a record month of new clients retaining us for new searches. At the same time terms have been agreed for clients on an unprecedented number of new purchases for the time of year.
A market defined by ‘Wants and Needs’
Whilst many contrasts and comparisons have been made regarding a North, South divide in the property market, in our opinion based on our national coverage, the market appears to be more clearly defined by ‘wants’ and ‘needs’ at the moment. From remote villages in the Lake District to the chic boroughs of West London, our search consultants are encountering good quality properties that have been realistically priced by vendors ‘needing’ to sell, and equally are finding overpriced property for sale by vendors who ‘want’ to sell, but are hanging on to the vague and unrealistic notion that, if they wait long enough, they may achieve a 2007 sale value.
Garrington anticipates an increasing amount of property stock coming onto the market in the autumn, and as seen in the graph below with the average time a property is on the market being roughly over twice as long as in 2007, Garrington believes buyers are in a stronger position now than they have been for some months, thus creating a window of opportunity.
In recent weeks the Government, and in particular the Chancellor, has been coming under increasing pressure to launch economic stimulus measures to help revive the economy. The scale and type of any such measures will arguably affect market sentiment and outlook over the autumn period.
As we enter the autumn, Garrington believes that there are some rays of light which may help the property market. The Bank of England’s ‘funding for lending’ scheme appears to already be creating more competition in the mortgage market, with several aggressive rates launched in recent weeks. Many of the sales agents Garrington are in touch with are also reporting a good selection of new property being prepared for marketing, thus creating more purchasing opportunities, and in turn a new wave of potential buyers once sold.
For the confident, well informed purchaser who ‘needs’ to move we believe the autumn market may well present interesting opportunities.
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