The housing market continues to defy the prevailing winds impacting household budgets. This is according to Nicky Stevenson, MD of Fine & Country UK, who says that as final COVID restrictions are eased across the nations, demand for property remains high. Annual price growth is strong, and sales levels are robust.
“March marks two years on from the unprecedented announcements of nationwide lockdowns in the face of COVID-19. Across the nations, final restrictions are being lifted as the UK adapts to ‘living with COVID’. As it did in the wake of the Global Financial Crisis, the housing market has yet again proved its resilience. The average price of a property in the UK is worth over £40,000 more than at the start of the pandemic, with the average price of a prime market property nearly £180,000 higher,” Stevenson comments.
She continues saying that the UK economy grew by 7.5% over the course of 2021 and is tracking back to its pre-pandemic level. The latest employment data indicates a record 29.5 million employees were on payroll in January, while unemployment fell to 4.1%. “However,” Stevenson adds, “global conflict is placing additional pressure on inflation; fuel prices are reaching new records and consumer confidence in the economy is faltering. The GFK note consumer confidence in February is at its lowest level in 13 months, with consumers increasingly conscious of balancing the household books and concerns about the wider economic situation. The Bank of England Monetary Policy Committee may well raise the base rate of interest again at its March meeting, set to take place the week before the Chancellor presents his Spring forecast statement.”
Stevenson notes that despite the economic headwind, to date in 2022, the housing market has continued to flourish. Sales volumes in January, except for 2021, were at their highest level since 2007 and up 9.5% compared to January 2020. The Bank of England have reported mortgage approvals were up 7.2% versus 2020, showing their third strongest start to a year in the last decade. Mortgage rates also remain highly competitive.
“After months of dwindling stock there are signs that the volume of new property being brought to the market is starting to improve. Data suggests that the volume of new stock to the market in January was 80% higher versus December, albeit from a very low base. Rightmove report new property listings are up 11% year-on-year, with requests for home valuations on the rise. While such news is positive, with buyer demand remaining robust it remains firmly a seller’s market. The national indices for price growth continue to report month-on-month price rises, competition among buyers leading to around 37% of available properties selling for over their initial asking price. The average price of a property brought to the market in February rose by 2.3%, the equivalent of £7,785, the most significant jump recorded in more than 20 years,” says Stevenson.
Looking specifically at the prime markets, Stevenson adds that activity across the UK remains brisk. “The entry threshold for a prime market property is now £500,000 or more in all regions of England except the North East, Yorkshire and the Humber and Wales. Annual price growth in the latter two remains in double digits,” she says.
“The price of a prime market property in London is still lower than a year ago. Heightened demand here from overseas buyers may well see price growth return over the coming months. Following the Russian invasion of Ukraine, the government is set to fast-track its Economic Crime Bill, including the introduction of a register of foreign owners of UK property. Non-British buyers will be required to declare and verify their identities with Companies House, with the register backdated for 20 years in England and Wales,” Stevenson concludes.
Fine & Country specialises in the sale and rental of prime residential properties. The company has offices in 300 locations around the world including Hong Kong, South Africa and Australia. Fine & Country has won Best Estate Agency Marketing and Best International Estate Agency Marketing seven times in the past 10 years at the International Property Awards.