Buoyant spring market predicted as Brexit jitters fade – but newly confident sellers are warned against overpricing, with affordability still an issue for returning buyers.
The London house price recovery continued apace this month with the largest monthly price rise ever recorded in January, pushing the average London asking price to £612,500.
Asking prices for a home in the capital rose by £12,320 compared to December 2019, an increase of 2.1 per cent, according to the latest figures from property portal Rightmove.
The number of sales agreed was also up 19 per cent compared to a year ago, as buyers who had been deterred by years of political uncertainty since the EU referendum in June 2016 returned to the property market following the Tory general election landslide win last month.
Rightmove said it expects a buoyant spring market for London homes in the “window of stability” following the election. “The housing market dislikes uncertainty, and the unsettled political outlook over the last three-and-a-half years since the EU referendum caused some potential home movers to hesitate.
There now seems to be a release of this pent-up demand, which suggests we are in store for an active spring market, with more properties being listed by new sellers than we have seen in recent years,” said Rightmove’s Miles Shipside.
Estate agents also reported a “post-election bounce” in the second half of December. “Things usually quieten down before Christmas, but we had three times the number of offers in the last two weeks of December than the first two weeks,” said Marc von Grundherr, director at Benham & Reeves.
As a result, year-on-year house prices rose by 3.1 per cent, the highest annual increase since September 2016. However, Mr Shipside warned newly confident sellers against overpricing their homes, saying that buyer affordability is still stretched and therefore the property market remains price-sensitive.
“One factor behind the upwards price pressure has been the shortage of property coming to market, with 2019 numbers down by 19 per cent on 2018 and some would-be sellers postponing their moves until they judge the outlook to be more certain,” he added. “This month sees new seller numbers still down on the prior year, but by a less-dramatic 10 per cent.
“While there may well be more twists and turns to come in the Brexit saga, with London prices now rising again and not enough properties to satisfy this buyer demand, there is an opportunity for sellers to get their property on the market for a spring move.”