Date Published 19 February 2013
There are signs of continued improvement in the health of the property market according to the latest Rightmove House Price Index.
At £235,741 the average price of newly marketed property is the second highest ever seen in the month of February, just
£2,115 shy of the February record set in 2008 prior to the collapse of Lehman Brothers.
There are also encouraging signs of life among home-movers too as the Rightmove website recorded its busiest ever month in January. However, Rightmove research indicates that those most likely to buy and sell in 2013 are the ‘old hands’ with greater access to equity and finance, who have the confidence and the will to move.
Miles Shipside, director and housing market analyst at Rightmove comments: `There has been a sprightly start to 2013 and, while market activity remains patchy across locations and property type, some agents are reporting their busiest new year since the onset of the credit-crunch. While encouraging, it’s far too early to pop the champagne corks as certain sectors will remain on ice until the return of wider-spread mortgage availability. However, our research suggests that with age comes experience and, more importantly, equity, and it these old hands that seem most confident to plan a
move this year.`
New sellers increased their asking prices by 2.8% (+£6,312) this month, pushing the national average up to £235,741. Whilst it is usual to see asking prices increase between January and February, this is the highest average price recorded at this time of year since 2008. This illustrates the slow but steady recovery in prices, which has taken five years, though it must be noted that the national average can mask the divide in the market between those with access to equity and finance and those without.
Whilst all regions have recorded a rise this month, some of the more dramatic increases reported in the northern regions are effectively ‘rebounds’ from substantial falls measured on the low levels of new listings in November and December.
The start of a new year, combined with more new stock coming to market after the Christmas lull, traditionally boosts activity, though in recent years this has been tempered by the economic backdrop. However, this year Rightmove has recorded its busiest ever month in January with those planning a move searching in record numbers and contacting agents with more follow-up enquiries than ever before.
Shipside observes: `Interest in property has hit such a peak that Rightmove is now the sixth busiest website in the UK¹. Pages viewed on the Rightmove website reached a new record high in January, up by over 20% year-on-year and, importantly, resulted in more enquiries to agents and developers than ever before. While the journey between expressing interest and closing the deal has many more twists and turns than before the credit-crunch, it is a sign of increased confidence and helps build a momentum that has been sadly lacking in many local markets over the last five years.`
‘Movers and shakers’ in 2013
Further Rightmove research indicates that those with access to equity and finance will be the main ‘movers and shakers’ in 2013:
Seven out of ten (71%) who intend to sell are aged over 45
The two most active age ranges are the 45 to 54 bracket, making up 25% of those planning to put their properties on the market in 2013, and the 55 to 64 year olds who add another 30%. Those aged over 65 contribute a further 16%, leaving just 29% of intending sellers aged under 45.
Shipside notes: `They say life begins at forty, but in today’s housing timetable you do not reach your upwardly-mobile prime for at least another five years. It’s another stress to add to your mid-life crisis list that bettering your property lot is being pushed back into middle age, postponing your mortgagefree status and putting you at risk of being an OAP mortgagee, and possibly even delaying retirement.`
Half of those who intend to buy (49%) will be doing so for at least the third time With the proportion of those intending to buy for the first-time making up just 22% of all prospective buyers in 2013, the main activity is concentrated on those who have bought before. 29% state they are buying for the second time, while for 49% this will be at least their third purchase.
Shipside observes: `The experienced ‘old hands’ who have built up equity through previous properties are at an advantage as they can raise the substantial deposits required by lenders. Interestingly, they are often the ones who benefit most from the very low interest rates facilitated by the Funding for Lending Scheme (FLS). While the scheme was intended to make loans more readily available to those struggling to raise finance in the business and housing sectors, it would appear
that many risk-averse lenders are subsidising the better-off who could fund a move anyway. With those trying to buy for the first time stuck at around a quarter of all purchases, nearly half pre-creditcrunch levels, in many instances the FLS is not yet supporting the mass market where the improvement on transaction levels could be much more dramatic. It appears this cheap money frenzy is mostly prompting more transactions among the equity blessed, some of whom will be
purchasing buy-to-let investments.`
‘Downsizing’ number one reason for selling in nine out of ten regions in the UK
In every region bar London the most common reason given by prospective sellers for moving was their desire to ‘downsize’. A move for ‘lifestyle reasons’ was the second main driver overall, with the need for ‘more space’ taking third place nationally but first place in London. This underlines the affluence of the London market, where sellers who can afford to trade up outnumber those seeking to trade down, a marked contrast to the rest of the UK.
Shipside comments: `Those who bought thirty to forty years ago reaped the rewards of several price booms and many are now of an age where they wish to downsize, release equity and reduce their outgoings. These make up the largest group of intending sellers and, in many instances, they have the advantage of being cash buyers. With increased life expectancy they face the challenge of supporting themselves financially for longer than previous generations, but have the head start of
multiple-level return on their original investment in property.`