At the beginning of each year, those of us active in the property market will analyse and predict what we think will happen to it in the next 12 months. Whether you are a family considering an up-market move, a Buy to Let Investor, First Time Buyers, or simply looking at a move to maximise your property investment, its really important to think before you act!
Questions on everyone’s lips this New Year are: –
What will house prices do this year?
Will trends from 2015 continue with regard to supply and demand?
How will taxation changes effect the buy to let market ?
When will be the best time to sell my house? When will be the best time to buy a house?
Will interest rates finally go up this year?
I have read a number of articles in the last few days from industry specialists including the National Association of Estate Agents, Rightmove, Zoopla, Property Reporter and Estate Agency Today. I will endeavour in the next few paragraphs to answer those questions and summarise the views of some property experts, as well as offer my opinion too!
Rightmove is reporting its strongest December since 2006, with the annual average property price coming to the market up from 6.2% to 7.4%. Rightmove also forecasts a 6% rise in prices in 2016.
Read the full article here
Buyer enquiries are up 37% since October, properties coming to the market are down 5% compared with this time last year. If you are a first time seller, advice is to sell by April before the stamp duty and taxation changes come in to affect for Buy to Let purchasers. First Time Buyers may wait until after April when house prices may take a small slump with the lack of demand.
So, what does this mean for house prices. At the lower end of the market, prices may still increase in the early part of the year as investors get in early. But after then, this set or of the market may stagnate or even fall slightly with cautious First Time Buyers seeking a bargain.
The Nationwide are predicting an overall annual increase of between 3-6% in house prices. And I would tend to agree that we will have a healthy rise in prices again for one reason only. Lack of Supply. I see no reason that we will see more houses coming to the market in 2016 as we saw in 2015. The frequency of moving house in the UK has fundamentally changed in the last few years, with only 5% of homeowners looking to move.
The most interesting sector of the market is going to be the Buy To Let. The government are attempting to aid first time buyers and slow the investor market by increasing both personal income tax and stamp duty for those investors with more than one property. I think this is a risky strategy. Some investors will seek to sell their portfolios, thus supplying the market. However, most investors may just increase the rents to their tenants to help offset their tax liability. So, the poor tenants will end up paying the bill!! The argument that most tenants are renting due to affordability is not true. A good number of our tenants are in rented accommodation as a lifestyle choice. They don’t want to be part of a volatile property market with property prices going up and down in a cyclical process. These people will have no option but to pay the increased rents.
The next question is “when is the best time to sell my house?” Most of you who are still reading would expect me to say “NOW”. The fact is, however, the seasonal variations are not as pronounced as they used to be, with November and December figures bearing out strong sales performance. So, the best time is “whenever you are ready”. BUT, I would recommend that if you have a smaller property suitable for the rental market, then January and February will be the busiest time for BUY TO LET investors, with prices at their peak.
Specialist low key marketing is becoming a very successful method for those looking to move up market before they have found the right home. As agents, we actively promote a property to our database without using the property portals like Rightmove and Zoopla. The vendor feels no pressure as a buyer can be “lined up” without be pushed to move into temporary accommodation or compromising on the next property.
And the final question on the list is – INTEREST RATES. Most pundits are talking about a rise in the middle of the year, by a quarter of a percent. It is almost impossible to predict as we have been certain on a number of occasions over the last 4 years that rates would increase. Perhaps is will finally happen in 2016!