Market commentary and predictions for 2015
It is the time of year when the property papers and housing pundits are all asked what is going to happen next and the conflicting views are already starting to appear in the press. The Centre for Economics and Business Research have predicted an average fall in house prices outside London of 0.8%; Estate agents Savills have predicted a 2% increase in the regions in 2015; JLL are predicting a rise of 5.5% outside greater London, with parts of the North and North East likely to show some of the highest percentage increases in country. A stark range in opinion from respected sources.
According to Rightmove, the average asking prices for homes put up for sale across England and Wales in November and December 2014, fell 3.3%. It can’t all be good news we report and it was London that really caught our eye at the close of 2014, with average asking prices in the capital dropping £30,000 from the beginning of November to the end of December 2014. In the same period in North Yorkshire and the North East, prices seemed to drop 2.5%. Perhaps the slight shudder that London prices are currently experiencing is making sellers more realistic which, in our view, can only be a positive move for the market in terms of increasing transaction levels and buyer confidence. It will also please Mark Carney to see transaction levels increasing and the stamp duty war chest filling. In North Yorkshire, from January 2013 to August 2014, the number of detached houses selling month by month had doubled. In order to maintain this flow of revenue and to maintain the country’s recovery, interest rates need to remain low.
So, where does this leave us for 2015?
The Search Partnership, specialising in the purchase of residential and agricultural property on behalf of retained clients in the North of England, are of the view that the momentum favours the northern half of the country, especially in the more popular towns and cities. We believe that despite the relatively poor performance over the last quarter of 2014, there will be a 3% to 4% increase in prices in North Yorkshire. The surrounding counties are likely to see similar growth.
This view is cautious in comparison to the RICS who expect all parts of the UK to see modest price rises during 2015, at an average of 3% but they state that the North West, South East, West Midlands, Yorkshire and Humberside will see the largest rises at 5%, whilst in London, prices will be stagnant.
In order to put some more detail into our views, it is our firm view that the lower end of the market in the North will be the star performer in 2015 underpinned by a robust buy-to-let market with strong yields, particularly in lower value areas, as well as the reductions in Stamp Duty. The middle market (£300,000 to £750,000) is also likely to show some steady growth as the effect of a stronger lower market helps those looking to move up the ladder. We believe that the higher end of the market is likely to remain stubborn and the percentage of any price change at the top end of the market will depend on the aspirations of sellers and the advice they are given by their agents. It is worth remembering that according to Land Registry data, in North Yorkshire, the average price of a detached house is currently just over 10% lower than the average price paid at the peak of the market in late 2007, over 7 years ago. Realism at the top end could be the best mantra for sellers looking to find a buyer in 2015.