A Market Turned on it’s Head

With Halifax releasing its House Price Report this week it is easy to see the headline – prices up 7.6% to an all-time average high of £261,221. But look below the headline and it’s a mixed picture. London and the South East in general, usually leading the way in property booms lags behind with 2.5% growth which compares almost exactly to general retail inflation. Compare that to Wales where inflation is at over 13% or Yorkshire at 11% and its clear to see that a North/South divide is opening up, albeit the exact opposite of what we’ve been used to in the past.

Why might this be?

We asked members for their thoughts – as professional property buyers, nobody else has their finger so firmly on the pulse of the market.

Here are the reasons we were given;

  • The Covid Effect. The pandemic, now hopefully almost behind us reminded people of the importance of lifestyle and a work/life balance. There was a mini exodus from cities and crowded southern areas into seaside and more rural areas. Wales, Yorkshire and the South West has seen the benefit in prices paid.
  • Cladding. Many London properties are in effect blighted by the cladding scandal. Buyers and lender have been reluctant to purchase in properties that might be affected, many of which are in London and the South.
  • Buy to Let hesitation. Investors with pots of cash held back as the pandemic hit, waiting to see how things would turn out. Many invest in the South, driving up prices and fewer buyers has led to a cooler market.
  • The Travel Ban. With many corporations no longer requiring staff to travel to work and foreign visitors reducing to almost zero, slick city apartments have seen a rapid fall in demand.
  • Reduced New Building. The pandemic affected the building sector with all but the most essential works stopping. We are still feeling the effects of this with fewer new homes being completed and then sold. Many of the largest new developments are in Southern areas.
  • An Overheated Market. Many potential buyers are put off by the worry that we are currently at the ‘top of the market’. Sky-high prices has resulted in many first time buyers delaying a purchase to see what might happen in coming months.

And what of the future?

Our members believe that the market will hold firm for the remainder of the year, becoming quieter over the Winter period as usual. If rates remain low and banks continue to lend, most members expect another busy year in 2022!

Information collated by Jonathan Rolande of House Buy Fast

Jonathan Rolande

Jonathan Rolande (MNAEA MICBA MARLA) began in the property business in the late 1980’s and is a Director of House Buy Fast and helped to found The National Association of Property Buyers in 2013. He has worked closely with The Property Ombudsman to develop a Code of Practice for Residential Property Buying Companies.