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TODAY'S OTHER NEWS

Boris Bounce: two more signs of an improving market at last

Whisper it quietly but the housing market could be significantly stronger in 2020 than in recent years.

Two key indicators in the past 24 hours have suggested that a Boris Bounce - characterised  by much-increased buyer confidence - could be underway. 

Firstly the latest market snapshot from the Royal Institution of Chartered Surveyors shows sales sentiment improving noticeably - the best result since the RICS survey of May last year.

Sales expectations for the next 12 months rose to a net balance of +66 per cent; it was +35% in November.

Meanwhile enquiries from buyers have also risen, as instructions have increased over the month.

As a result, RICS survey respondents anticipate house prices rising over both the next three and next 12 months.

Regionally, the majority of areas saw interest from new buyers increase, with respondents in Wales and the North East in particular reporting solid growth. 

Enquiries also rose in London and the South East, marking a noticeable turnaround from the negative results in November.

Alongside a rise in enquiries from buyers, the number of agreed sales edged up at the national level, a +9 per cent net balance. 

This is the first time since May 2019 that the number of agreed sales has shown a positive result.   

Simon Rubinsohn, RICS chief economist, says: “The signals from the latest RICS survey provides further evidence that the housing market is seeing some benefit from the greater clarity provided by the decisive election outcome. 

“Whether the improvement in sentiment can be sustained remains to be seen given that there is so much work to be done over the course of this year in determining the nature of the eventual Brexit deal. 

“However, the sales expectations indicators clearly point to the prospect of more upbeat trend in transactions emerging with potential purchasers being more comfortable in following through on initial enquiries.

“The ongoing lack of stock on the market remains a potential drag on a meaningful uplift in activity although the very modest increase in new instructions in December is an early hopeful sign. Given that affordability remains a key issue in many parts of the country, the shift in the mood-music on prices is a concern with even London expectations pointing to a reversal of course both over the coming months and looking further out.”

The second sign of a potentially good market in 2020 comes from HM Land Registry data just released.

It shows annual house prices in November rose 2.2 per cent taking the average house price to £235,298 in the UK.

Between October and November prices went up by 0.4 per cent.

This figure comes just a week after Halifax reported a 4.0 per cent annual price rise for homes in the year to the end of December.

In London, where prices have dropped recently, the Land Registry’s figures showed a 0.5 per cent fall between October and November - but annually there was a slight rise of 0.2 per cent taking the average property price in London to £475,458.

North London agent and former RICS residential chairman Jeremy Leaf says: “Although reflecting what was happening a few months ago, these figures still provide the most comprehensive assessment of house prices nationally. They confirm market resilience we have been seeing on the ground for some time, despite considerable political turmoil in the build-up to the election and Brexit uncertainty.

“Nevertheless, it is clear prices have been underpinned by a shortage of stock and insufficient house building in areas where people want to live most despite recent improvement. Near record low mortgage rates and employment levels are playing their part too. They are closely watched too not just for what they say about the property market but the health of the wider economy and consumer confidence.”

And Jackson-Stops chairman Nick Leeming adds: “Post-election, a degree of certainty has now been welcomed back to the market and the property industry is set to be entering a new phase of growth. With the so-called ‘Boris bounce’ set to create momentum in the industry, we expect to see a release of pent-up property demand and for the market to return to business-as-usual.”

  • Russell Quirk

    And just as significant, the mood of the Bank of England MPC has turned toward a future cut in interest rates whereby cheap mortgages are set to become even cheaper.

    It’s the low cost of money that has really fuelled house prices over the last decade or so and so if there’s a collision of positive sentiment and even lower mortgage costs, the scene is set for a buoyant market.

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