The housing market now appears to be the most stable it has been in 10 years. The average asking price for homes in April reached a record high, while the amount of agreed sales also peaked at their highest since 2007. Data from Rightmove shows that the average property price in April grew to £313,655, which is a monthly rise of 1.1%.
This would suggest that confidence in the housing market has increased, with buyers feeling more comfortable about investing in their homes.
It could also be suggested that the housing market appears more stable because of an increase in the supply of homes, which comes as a result of the government’s promise to build 200,000 homes a year until 2020.
A recent Housing White Paper also sets out proposals for helping more people purchase homes. One way the government aims to achieve this is through their Help to Buy schemes, which have been used by over 1 million people looking at buying a new home. Figures from the government show that over 868,000 Help to Buy ISAs have now been opened, and other Help to Buy schemes have been used by 259,000 people in order to buy a home.
These figures are likely to give confidence to developers, as more people are able to purchase homes with the help of the government, potentially resulting in more new homes being built.
Also helping the housing market is the fact that mortgage rates have fallen. The average new lending rate has reached its lowest level, 2.2%, meaning that most average monthly payments will be a lower proportion of a borrower’s income. Practically, more affordable lending could encourage more people to purchase new homes, something that would further assist the housing market.
Record levels of mortgage rates have also had an impact on the number of remortgages carried out in February this year, as homeowners rushed to take advantage of these improved rates. As a result of this rise, the number of remortgages has also reached a record – the highest number of remortgages in one month since 2009.
Although some may see the General Election as having the potential to disrupt the current stability of the housing market, an analysis of data from previous elections suggests that the actual impact is likely to be relatively moderate.
This analysis suggests that the main factor that can influence the housing market are the usual purchasing patterns, as Spring and Autumn are the main buying seasons and therefore the most likely to make a difference to the current stability of the housing market. The analysis looks at the impact other, more specific issues may have on the housing market, such as changes to Stamp Duty Land Tax. Last year, for example, when a 3% surcharge of Stamp Duty was introduced for buyers of additional houses, completions of purchases in March were substantially higher than April, as buyers rushed to complete before the surcharge became effective.
This information gives a positive view of the housing market not only at present, but also for the upcoming year. BHW Solicitors offer a wide range of property advice, from New Build and Residential transactions to Commercial Property. If you require any assistance then please do not hesitate to give us a call on 0116 289 7000.