Rightmove index shows broad based recovery
The price of newly marketed property increased by 0.3% representing a rise of £860 in July boosting year on year growth to 4.8%, a total of £11,561.
Miles Shipside, Rightmove director and housing market analyst, said: “The market is currently benefitting from the aggregation of marginal gains where incremental improvements across a range of key market drivers compound to slowly but surely build momentum.
“Rightmove’s lead indicators show increases in enquiries, new sellers and marketing prices. An important milestone for a broader-based and sustainable recovery is that all regions of the country now have higher prices than a year ago firmly on the record.”
The data revealed all regions up year on year for the first time in nearly three years contributing to the positive national picture.
Early findings from Rightmove’s latest Consumer Confidence Survey, which has already received more than 25,000 responses from home-movers, showed that 62% expected property prices to be higher a year from now, double the amount recorded a year ago.
Shipside said: “The price optimists have doubled compared to just 12 months ago and now outnumber the price pessimists ten to 1. Consumer confidence is key to the housing market and on this front there has finally been a year of minimal bad news with a reasonable amount of good after four years of pretty consistent doom and gloom.
“A combination of apparent economic stability internationally or at least less widely-reported turmoil and uncertainty and some positive signs of an economic upturn nationally, mean more home-movers are willing and able to increase their financial commitments.
“Barring a raft of bad economic news we expect the positive impact of this on the property market to continue.”
Evidence of an increase in housing transactions suffer from a considerable time-lag but HMRC’s most recent year to date figures are up by 5% on 2012. Whilst also time-lagged, the Bank of England figures for mortgage approvals year to date are up 6% on last year. And with mortgage surveyors reported they are struggling to cope, Rightmove anticipates a surge in mortgage offers.
In a clear signal of a new business pipeline building, Rightmove’s email enquiries to agents and developers are up 18% year-to-date compared with 2012.
The front of the housing market pipeline is also showing more activity with new seller numbers up 5% this month compared with July 2012.
Shipside said: “Confidence and the ability to take on a long-term mortgage commitment give more buyers the spur to enter the market or trade up. The route from property enquiry to trading onto or up the property ladder has been cleared of some obstacles, resulting in a partial unblocking of pent-up demand.”
The markets don’t expect a base rate rise until the latter half of 2016 and the Funding for Lending Scheme is showing signs of fulfilling its promise of creating competition that eases mortgage rates and increases availability.
This is coupled with the boost from the Help to Buy scheme which is capturing prospective buyers’ interest.
Since the launch of the Help to Buy equity loan scheme in April this year the Homes and Communities Agency has reported that almost 7,000 reservations have been made.
Shipside added: “The ability to borrow is increasing as the Funding for Lending Scheme starts to really deliver though it still favours those with better deposits.
“Lenders are squeezing their margins and, with the prospect of no base rate rise for three years, consumers are increasingly aware of moving options rather than debt burden.”
Shipside said the Help to Buy scheme has already created a marked upturn in the new-build market as recently reported in some developers’ trading updates.
He added: “We even hear that some developers are ‘running out of bricks’. While stocks of some brick styles have no doubt been run down, a similar impact on the bricks and mortar of the resale market is possible from January next year.
“The outlook for more moves and movers for the second half of 2013 and beyond is increasingly positive”.