Last week the UK had so called ‘Freedom Day’ where all restrictions were ‘lifted’ and people were in theory allowed to return to living normal lives. However, with cases rising, travel restrictions changing on a daily basis and talk of further lockdowns by autumn, it’s easy to see why it doesn’t quite feel like we are ‘FREE’ just yet. But what about the property market – that doesn’t seem to be all doom and gloom?
I think the secret in the property market over the long term will be much like the restrictions. In areas where it is rushed (house prices shot up rapidly), things will have to be readjusted slightly at some point, but in areas where the rise was more modest, the fall will be less severe.
Let’s take London for example. The usually busy London housing market trailed behind the rest of the country in the stampede of activity over the last year, with the average time to complete on a home in the capital taking 57 days compared to the national average of 34 days. It’s a similar story with pricing, where crazy pandemic price tags have meant the average house price across the UK has risen 5.7 per cent but edged up just 0.5 per cent in the capital.
Over the course of the pandemic, prices in the more affordable outer boroughs of London soared as buyers’ swapped convenience for space, while the more central areas of the city recorded price falls.
This trend is now slowly and cautiously reversing in anticipation of offices reopening in the autumn. This month asking prices in Westminster rose five per cent to £1,437,811 – the highest jump of any district of London, followed by Kensington and Chelsea (up 2.4 per cent to £1,689,368). Camden and Islington also saw positive change.
The spike in activity over the last 12 months has most certainly created a “bubble” in some parts of the UK. According to Rightmove, the average asking price of a property coming to market has hit a new record high for the fourth consecutive month, and it is now £21,389 higher – 6.7 per cent – than six months ago. The new all-time high of £338,447 follows a June-to-July rise of 0.7 per cent – the largest monthly rise at this time of year since July 2007.
History tells us that such rapid house price growth simply isn’t sustainable. The only two areas which showed negative monthly growth in July were London and Yorkshire and Humber.
I think there will be a lot of investors wanting to cash in their gains over the next few months and use this time to readjust their portfolios and get rid of properties they no longer require.
If you would like a no obligation valuation on selling your property away from the open market for cash, WeBuyProperty can discuss your options, offer free advice and, if you decide to go ahead, we can transact in a matter of weeks.
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