Once again, early year market activity has not disappointed. This is the fifth January in-a-row where the residential sales market has hit the ground running as soon as we returned to our desks.
To recap, 2014 was a year of two halves.The first six months saw strong activity right across price ranges – quite frankly, the starting gates flew open. But just as we were about to loosen the reins and push on into a full gallop, the Bank of England halted the momentum with its cautionary suggestion of an earlier increase in interest rates than predicted. Greater mortgage regulation helped slow the pace even more.
A long-term comfort to our market, however, is that Mark Carney so clearly adapts to market reactions. Latest predictions now expect the ‘new normal’ level for rates to sit at around 2-3% and, also, that the incremental increases may not start until Q4 2015 but, in all likelihood, in 2016. With low inflation, the crude oil price meltdown and weak wage growth, it looks like 0.5% may be banked upon for this present year.
The 2014 Autumn Statement announcement of stamp duty reforms was a surprise but it’s proving a good thing for the greater bulk of the market in that house purchases less than £937,500 will now face lower stamp duty charges. Above this threshold, the market is already beginning to absorb the changes and the higher cost of moving is now being consistently raised in our sales negotiations between purchasers and vendors.
The Christmas holidays are always an important decision-making time for both buyers and sellers. And, such is the pace of modern consumer demand, people seek immediacy as soon as the decision has been made to move. Hence we now advise vendors to launch to market as early as possible in the new year to, quite frankly, embrace and satisfy the “I want it now” mentality.
Marketing in the first three months of 2015 is more important than ever this year with the General Election bearing down on us on 7 May, as we anticipate a nervous pre-election lull in April. The mansion tax, or variations of it, favoured by both the Labour Party and Liberal Democrats is already having an unsettling impact on the prime markets both in and outside London. Should I put my money on it, I cannot visualise these pre-election manifesto proposals becoming post-election policies but who’s to say?...
So, the year has started with strong apres-Christmas pent-up demand, a renewed confidence in interest rates staying at 0.5% and continuing confidence in property as a non-volatile asset (unlike the recent performances of the stock market, currencies and commodities, not to mention oil). Average UK house prices are anticipated to rise by 3.5% in 2015 with ‘steady-as-she-goes’ growth over the next 5 years – some suggesting by 18%.
With the coalition government ‘consciously uncoupling’ itself into distinct blue and yellow rosette stances when it comes to views on housing market intervention, it is unlikely that the Spring Budget will see any significant policy initiatives which will have a direct impact on the housing market, such as Help to Buy or further SDLT reforms.
The only certainty about the General Election when it comes to the housing market is the date itself. So if you’re in the market for a move, we’re saying best make it now.
To recap, 2014 was a year of two halves.The first six months saw strong activity right across price ranges – quite frankly, the starting gates flew open. But just as we were about to loosen the reins and push on into a full gallop, the Bank of England halted the momentum with its cautionary suggestion of an earlier increase in interest rates than predicted. Greater mortgage regulation helped slow the pace even more.
A long-term comfort to our market, however, is that Mark Carney so clearly adapts to market reactions. Latest predictions now expect the ‘new normal’ level for rates to sit at around 2-3% and, also, that the incremental increases may not start until Q4 2015 but, in all likelihood, in 2016. With low inflation, the crude oil price meltdown and weak wage growth, it looks like 0.5% may be banked upon for this present year.
The 2014 Autumn Statement announcement of stamp duty reforms was a surprise but it’s proving a good thing for the greater bulk of the market in that house purchases less than £937,500 will now face lower stamp duty charges. Above this threshold, the market is already beginning to absorb the changes and the higher cost of moving is now being consistently raised in our sales negotiations between purchasers and vendors.
The Christmas holidays are always an important decision-making time for both buyers and sellers. And, such is the pace of modern consumer demand, people seek immediacy as soon as the decision has been made to move. Hence we now advise vendors to launch to market as early as possible in the new year to, quite frankly, embrace and satisfy the “I want it now” mentality.
Marketing in the first three months of 2015 is more important than ever this year with the General Election bearing down on us on 7 May, as we anticipate a nervous pre-election lull in April. The mansion tax, or variations of it, favoured by both the Labour Party and Liberal Democrats is already having an unsettling impact on the prime markets both in and outside London. Should I put my money on it, I cannot visualise these pre-election manifesto proposals becoming post-election policies but who’s to say?...
So, the year has started with strong apres-Christmas pent-up demand, a renewed confidence in interest rates staying at 0.5% and continuing confidence in property as a non-volatile asset (unlike the recent performances of the stock market, currencies and commodities, not to mention oil). Average UK house prices are anticipated to rise by 3.5% in 2015 with ‘steady-as-she-goes’ growth over the next 5 years – some suggesting by 18%.
With the coalition government ‘consciously uncoupling’ itself into distinct blue and yellow rosette stances when it comes to views on housing market intervention, it is unlikely that the Spring Budget will see any significant policy initiatives which will have a direct impact on the housing market, such as Help to Buy or further SDLT reforms.
The only certainty about the General Election when it comes to the housing market is the date itself. So if you’re in the market for a move, we’re saying best make it now.
Caroline Edwards
Partner
Residential Sales, Long Melford
T: 01787 888622
E: caroline.edwards@carterjonas.co.uk
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