Housing transactions are continuing to pick up across the UK, the RICS has claimed.
Transactions have now increased for four consecutive months, says the RICS. Prices stayed largely unaltered in the first month of this year.
However, the RICS says that demand from would-be purchasers has dipped slightly since the start of the year, accompanied by a slight fall in the number of homes coming up for sale, with surveyors suggesting that poor weather may have been partly to blame.
Looking ahead, chartered surveyors expressed optimism that transaction levels will remain on an upward trajectory.
Peter Bolton King, RICS global residential director, said: “Price falls across the UK have gradually stemmed in recent months and it is interesting to see that the amount of completed transactions are on the rise, as confidence returns to the marketplace.
“While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve.”
Separately, think tank the Centre for Economics and Business Research has predicted that the average price of a home in London is set to rise by 30% to hit £500,000 by 2020.
The CEBR says that house prices in the capital will rise at a slower rate this year than last year but will start to increase again towards the end of the decade.
Daniel Solomon, CEBR economist, said: “Before the decade is out, we predict the price of the average home in London will reach £500,000.
“House price rises will be driven by London’s comparatively rosy economic growth prospects, buoyed by IT, business and professional services.
“Nevertheless, house price growth in London will remain notably slower than in the boom years before the financial crisis.”
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Comments
Reading the prickly (no pun intended) comments from certain EAs with amusement - so we have another 'recovery' do we?
Just like we did during 2009 when base rates dropped and the first stamp duty holiday was going
....and just like we did in the months leading up to the end of the second stamp duty holiday.
And now we have yet another 'recovery' which has magically coincided with the (temporary) funding for lending scheme.
But I'm sure this time its a real recovery based on thoroughly sustainable fundamentals.
Its kind of like watching Homer Simpson repeatedly being shocked when undergoing donut aversion therapy. You know, some define intelligence as the ability to learn from experience...just saying.
@Happy Chappy
May well be that the stimulus is regional but have to say that we have not seen any great evidence of any of the government initiatives making a whole heap of difference in our neck of the woods.
Propertygal...you would be seeing such demand, as Rant n Rave has pointed out we have had significant government stimulus to the market. FLS, springboard mortgages, and lenader forbearance preventing higher supply of properties.
As well of course there is the BTL market (Yorkshire agent you should be getting some bargains up there given the falling prices)
Overseas investmen drives the London market
However, the fact remains for many young people owning your own home gets further away from being possible each year, hence the decline in home ownership figures
Demand in the property market is having offers at the asking price from 1 (or more) buyers within 24 hours. That is something we haven't seen for quite a few years but sold 4 last month in that way as well as others close to asking or less quickly. Yes the buyers have the money and have been fully checked out, especially when selecting which, of multiple offers, to advise our clients to go with. We are seeing a significant rise in demand from proceedable buyers.
@Jonnie do not be too hard on fellow, it took 29 years for the bastads to tell me war was over. Maybe HPC high command forgot to tell troops tasked with trolling EAT that they had surrendered.
what can i say ranter, you're right actually I've built my whole business over the last 20 years on gut feeling and common sense and to be honest i don't think i've once used my economics background, but it seems to work, as it does for many other small to medium estate agency business, the larger business who rely on econiomics and stats, with a very few exceptions, have not flourished at all. i survived the crash in the eighties (only just) and the 90's and I'll comfortably survive this one. Funnily enough though I've survived this one due to having a smallish property portfolio which acts as security when I need to inject money into my business. Very glad i bought those properties. Incidently I am buying property at the moment. Last time i did that was in 2003 and the time before that around 1997. I'll sell you one if you like - is that supply and demand?
Jonnie - I think there's a sense of exasperation with how the authorities are continuing to respond to the ongoing economic slump, for sure.
Several years on from the initial Credit Crunch and with the UK economy heading for a third recession, they've come up with a scheme to take even more funds from the prudent, savers and pensioners in order to further prop up the property market.
There's a feeling that this is going to provide yet another deadcat bounce in property prices and transactions, prompting a flurry of property porn / media hype about green shoots, 'can't go wrong with bricks and mortar' etc.
And then the stimulus will come to an end, causing prices and transactions to 'unexpectedly' fall back. Meanwhile, other countries who've let the crash happen properly, get on with building a proper economic recovery.
Yorkshire Agent - I'll answer that when you answer the question I asked you yesterday. You say you've got by when the UK property market last had as much stimulus thrown at it as it does now. When was that time exactly?
In my view there hasn't been a time, which tells me that despite your economics background, you aren't up-to-date or aware of how much government support there currently is in the UK housing market.
If I threw £80bn at something, I'd hope to see some response. If it affected my line of business, I'd want to know as many details of the scheme as possible, so I could bring that into my future plans. You on the other hand seem content to go by gut feelings and the alignment of the planets...
Yorkshire agent what is going to bring a boom at the end of this decade? are you predicting huge wage growth, deflation, a return to irresponsible lending, what will kick the boom off? And when you say boom do you mean in prices or transactions?
Jonnie - average house prices are kept at the current level by the London and SE market nothing else, there have been some substantial falls (even HPC) in many regions of the UK. Some those hpc'ers may have made some very astute purchases. (they are probably now secret HPI'ers) ;0)
rantnrave - you're clearly the world authority on all things related to property, so come on old chap/ess help us all out here and tell us when you are going to buy a house? Lets say the average house price round your area today is £200,000 and maybe it once was £240,000, so when will you buy? £180,000? £160,000? £140,000?? how low are they going to go? or maybe you're going to stop sitting around the house in your pants all day and go and buy a property now before the next boom at the end of this decade?
@BRIT
I assume you are still digging out your old predictions to share with us all?
Along with your ‘Spring Bounce’ term ive never used the term supply and demand in business but just to humour you and because Geordie agent doesn’t really owe you much more as you knew exactly what he’s saying to you an example of supply and demand is when somebody rings me up and asks to buy a property. If I have one to sell that he subsequently completes on a purchase of then that is regarded as the supply…………………..clear enough?
Regardless, I don’t know why you are concerned about this article, its really supporting the views of HPC’ers that when prices have / are falling volumes will increase so you should be enjoying it not pinging funny little arguments about
On the issue of little arguments, am I right In thinking there is now just a very small hardcore of HPCers left on the forum over there (Mark Wadsworth and his muckers) who are all feeling a bit frustrated that the very prediction that created the website hasn’t come to life yet and a good number of HPCer have abandoned ship and bought something rather than join the cock wafting over who’s a savvy little investor that week with gold etc. Be interesting to hear your views and from you too Rantnrave if you’re out there
Jonnie
You ask a question, get a reply with the answer and then ask the same question again. Quite brilliant really.
As for you cash and no brains, have you got an extra 5%? Once the Daffodils are up and gardens starting to look decent again the nesting season starts and all too soon your enough is 5% short
Brit1234, do you have a job?
Is that demand?
Any one can ring up and say they want want to buy a property, but surely demand or effective demand has to include them having the ability to buy not just want.
For example for a first time buyer you typically need a big deposit. If you haven't got that deposit you don't increase that demand.
So when people on here go on and on about supply and demand i think they are getting confused with peoples wants rather than ability to pay. Otherwise your transaction levels would not be so low and sellers would not keep relisting their unsold properties later in the year or with different agents.
yes brit1234, it is when somebody rings me up and asks to buy a property. If i have one to sell him that is regarded as the supply.
There is no boat to miss, just a ship holed under the water line, slowly sinking. The pumps are on barely keeping it floating but the damage is too much and it will eventually go under.
Can any estate agent here tell me what the demand is in supply and demand please?
??
Can't speak for the other two, but I have the cash in the bank to buy a property outright. I choose not to because the housing market currently offers such poor value and there are so many factors looking forward that will suppress prices.
In the meantime, the interest on my savings pays the majority of my rent. The landlord meanwhile is paying the maintenance and building insurance on an asset that is decreasing in value. I'm grateful to him for taking the loss so I don't have to. I very much doubt he realises that he is losing more money on his investment than I am paying him each month. Still, his problem, not mine.
Can any estate agent here tell me what is demand?
Institutional investors and Professional landlords who are buying property to rent out to those who can not afford a deposit. Those that consider a 6-7% yield will do quite nicely thank you.
@Brit, @Rant, @ SBC... sorry boys you have shit out waiting for the crash that had happened long before you knew about it and started whinging and bellyaching on here. You boys have been told this so many times that you only have yourselves to blame for missing a boat that was close enough to jump on 2 years ago
Very probably Happy.
Lower currency and money printing means the cost of food and fuel is going to continue to increase at a fair pace though, resulting in a further squeeze on real incomes. Unleaded at £1.50 a litre by summer? I can't see an easy way out of the mess that the govt and Bank of England are determined to inflict upon the nation in order to prevent last decade's bubble from deflating properly.
Once those countries that have allowed a proper crash to happen, particularly America, start to recover then the international money markets should turn their attention to the UK economy and then things will start to get interesting. Mervyn King should be thanking his lucky stars that he can retire this summer on an inflation-linked pension.
RnR I'm afraid we are more likely to see downward pressure on currency to compensate for higher taxes on foreign investors, to keep the London bubble pumped up, and make our exports cheaper.
Propertygal's first post would be a good summary of how most markets operate, but the housing market is very susceptible to change in the supply of credit and I can't see that included in her post anywhere. The abundance of cheap credit sloshing around last decade has gone and isn't coming back.
If there is a shortage of property in the UK, I don't think the same can be said about a shortage of bedrooms. The average occupancy per property may well be declining now, but in the next few years, the UK's biggest ever demographic bulge, the Boomers, will be looking to downsize from their empty nests and release some of their unearned equity.
Throwing in the end of today's stimuli and the lack of credit combined with the demographic changes coming up, will, in my opinion, see a significant downward pressure exerted on house prices (which may lead to more transactions for EAs).
Have we got people here doing the selective reading thing? –the RICS report is conducted over a very narrow section of the industry made up of old boys with patches on their tweed jacket elbows and ive never paid any attention to it, whether its ‘good’ or ‘bad’ news but some here get quite fizzy about it when its saying what they believe but when RICS have a bit of a cheery edge to it they wont hear of it….
BRIT123 my old son, happy 7th year on here or however long its been that you have graced us with your presence and views but for the love of god man your ‘spring bounce’ thing is a bit early this year isn’t it?
Anyway, bless you for collating all the cobblers CEBR has dribbled out over the years, for a bit of fun have you got some historic projections of your own to see how you’ve called it over the last few years?
Jonnie
Supply and demand, supply and demand, its all that estate agents seem to say but do they understand it?
Can any estate agent here tell me what is demand?
Propertygal, i specifically mentioned more ladlords, this does not equate to significant growth in transactions....where are all the properties for the landlords to buy.....lender forbearance helps reduce the number of repo's that the BTL love so much.
FTB'ers are now typically much older than before which is why first step properties are often out of the questions, However without "innovative" mortgage products driven by taxpayer money these people would not be able to afford a property. High core item inflation (including rent increases) and low wage inflation is reason for this.
Have you ever been to a country where the majority of the population cannot afford to buy or rent I have.
@Happy Chappy
It's not all about owner occupiers. Rents have increased significantly and as a result BTL's are on the increase with a high percentage of landlords looking to add to their portfolio this year. In addition FTB's have noticeably increased and are not restricted to the first rung of the property ladder in our experience.
Yorkshire Agent
Yes there is always a need for housing correct. However, a rising population does not correlate to high home ownership levels. Yes its supply and demand (but the demand is driven by available money not population) but with your first in economics you will of course will know this.
So funding for lending, BOMAD and lower prices have marginally increased transactions but what we will continue to see is people living with parent longer, more multiple occupancy, more landlords more tenants.......less transactions and stagnant nominal prices outside London and SE.
In short high transaction levels (Pre 2008 levels) will not return until easy credit becomes available or prices crash i can't see either happening.
.
There is much froth around the property market and people who like to link it to the wider economic situation. It is a fairly simple system of supply and demand with the caveat that when the external economic situation is poor people tend to sit on their hands. They will move eventually but postpone as long as they can.
However through the last downturn and this we have seen activity and fared well. The difference this time is that we are short ,over 5 years, of about 3m UK property transactions at a time when the population is increasing and the average occupancy of a property is decreasing. The demand is there but pent up and increasing, and since housebuilding was falling behind before the recession hit, and then all but ceased, supply is ever getting tighter.
Good for you Yorkshire Agent. When was that time when there was as much stimulus as there is now, by the way?
Are we using too big words for you? I'll keep this simple then.
Bank of England prints lots of money and throws it at the housing market. Flat housing market shows some signs of life.
Do you think this is the start of a sustainable recovery? The UK heading for a triple dip recession, FTBs needing ten years to save a deposit (see other article on EAToday) and the cost of living rising faster than wages all suggests not. If you've got anything that counters this, other than gut feelings, then by all means feel free to share it.
Seems to me that you don't understand the external factors which affect the property market. Simples.
I coped just fine, thanks for asking as there were still enough transactions.
Are Brit1234 and rantnrave, the same person? yorkshire agent is spot on, you two are talking garbage, clearly with a different agenda. you don't understand the property market. simples.
Good news about that message coming through. With your view that transactions are picking up and the news that you were having a quiet day, I was starting to think all that extra business was going to your competitors.
You seem very confident in the experience you have. Presumably you have therefore operated in a situation where the market has had as much state stimulus directed towards as it has now? Just out of interest, how did you cope when that intervention dried up? I'm sure your knowledge and experience in this area would be of benefit to others who in light of the current SMI / Funding For Lending / ZIRP schemes etc are thinking about such an issue.
yep 1st in economics, but wanted to earn a quid or two, so also qualified as a surveyor and ended up in estate agency. Lending policy drives the market in different ways and not everyone relies on lending. For example in 2009, transactions in my company were higher due to the amount of repossession business we catered for. Our industry relies on transactions. Anyone can analyse the property market and come up with all sorts of different conclusions, my belief and my current experience is the market is improving and will continue to do so, with the odd blip along the way no doubt. Anyhow, just had a message that a client, who has not sold yet wants a progress report, whats happening in the Japanese market now so i can accuratley tell her whether or not her house will ever sell?
You got a first in economics and you're an estate agent??
Brit's main point in his second post was that any current uptick in either transactions or prices is as a result of the current short-term stimulus of the Funding For Lending scheme. Your response completely ignores that and says the uptick will be sustained because that's what always happens (in your experience). Not exactly a comprehensive rebuttal is it?
should I reply to Brit, shouldn't I? ok I will, as got a bit of time to spare today. Firstly I would understand your argument, thank you, I got a first in economics. Brit listen up to me and everyone else who posts on this site 'YOU DO NOT KNOW WHAT YOU'RE TALKING ABOUT' Face facts, the market has picked up, we are seeing a rise in transactions, not necessarily a rise in prices (but that always follows - it's called supply and demand, you may have heard of it) I'm sure you are a very bright chap or chappess, but do us all a favour and post again on this site in 12 months time, 24 if you like and admit you were wrong, and then what will happen we'll see a steady rise in prices for maybe 5 to 6 years, then we'll have a boom and then it'll all go down hill again. Been there, done that.
Brit its winter not spring.
Poor you hate a positive news story!
RE "I've been in the industry for donkeys years and cover an area which includes a major city, suburbia, small towns and sleepy villages with prices ranging from £30,000 to over £1million. Please can you let me know what you base your 'death bed' on?"
Macro and Micro economics. If you just saw the news the BOE just announced inflation to rise over 3% and be above target for the next 2 years. Wages are frozen or being cut which is made even worse by high inflation.
What you are seeing in the housing market is not sustainable growth but a product of short term stimulus (funding for lending, newbuy, low base rate, SMI). Take away this stimulus and the market collapses including the inflated house prices.
We can talk about the coming bond crises, falling tax receipts, recession in China but I'm not sure your understand.
The housing market won't recover till house prices are allowed to find their true value without stimulus.
because, brit1234, should that be sh rather then br?, there is always a need for housing, people can only put their lives on hold for so long, people will always die, divorce, go in to debt, get promoted, have babies, move jobs, lose jobs, retire etc etc. and this is what we are seeing. So sorry brit, but the market has improved, is it a spring bounce? possibly, but it's been a better spring bounce than any of the previous 5 years. The reality is that the market is not on its death bed, I believe i am qualified to comment as I've been in the industry for donkeys years and cover an area which includes a major city, suburbia, small towns and sleepy villages with prices ranging from £30,000 to over £1million. Please can you let me know what you base your 'death bed' on?
What a load of old misery guts! CEBR do talk a load of tripe, but surely most of us have found the last 6 months better than the previous 3 years and there is definitely more confidence in the market now and acceptance of the new culture of static values.
PS: I don't work in London or the Home Counties!
Its all spring bounce/green shoot propaganda, the reality is the housing market is on its death bed.
If you don't believe me then ask yourself how can things get better when each year frozen wages are being eaten by high inflation and we are getting poorer?
I hate to fall for it, but who was doing most of the talking up of the market in 2007, 2008...?
Just for you, Yorkshire Agent, here's a CEBR report from 2007 which highlights their track record in predicting the direction of the housing market:
"Britain's housing boom will continue in 2007, with average prices rising by £1,000 a month, a report by a leading think-tank suggests.
The Centre for Economics and Business Research (CEBR) said it saw no evidence that increased interest rates would hit the cost of homes.
House prices will increase by 7.6%, the CEBR told The Observer newspaper.
However, slower growth is predicted in 2008 and 2009 before acceleration again in 2010.
There have been warnings that a string of UK interest rate rises - including a shock January hike from 5% to 5.25% - would cool the market.
The CEBR does not share the fears from some experts that there will be a correction in house prices of between 15% and 20%. "The underlying fundamentals of the housing market continue to support prices," John Ward, one of the report's authors, said."
http://news.bbc.co.uk/1/hi/business/6307239.stm
good grief - the first three stories are all positive about the property market - this makes me feel most uncomfortable, please can some people get on line and start telling us how it's all going belly up, that we're all parasites and someone also needs to start spouting nonsense about the japanese economy being in decline for the last 500 years etc etc