11:34 AM, 16th December 2019, About 3 years ago 1
With increased political certainty post general election and the potential release of pent up demand, Rightmove are predicting 2% house price inflation for 2020. This is more than double the current annual rate of 0.8%, but it’s still a relatively marginal increase in a price sensitive market. With its massive market share Rightmove has the ability to measure the prices of 95% of property coming to market.
Their House Price Index indicates resilient property demand moving into 2020, but a lack of supply is also a concern:
– The monthly decrease of -0.9% is the smallest at this time of year since December 2006, showing that sellers and their agents think that demand is strong
– Demand is outstripping supply with the number of sales agreed so far in 2019 down by just 3% on 2018, while number of properties coming to market down by 8%
– Fundamentals remain sound with low interest rates, lenders competing to lend, high employment, and wage growth helping buyer affordability
Rightmove’s property expert, Miles Shipside, said: “With much of the political uncertainty removed, we expect that the number of properties for sale will recover as more new sellers come to market, making up some of this year’s lost ground.
“However, property supply is still limited, with estate agents having the lowest proportion of properties available for sale in two years, and this will fuel modest gains in the national average asking price of property coming to market.
“The fundamentals remain sound with low interest rates, lenders competing to lend, high employment, and average wage growth outstripping house price growth and helping buyer affordability.”
“First-time buyers are the drivers of the market. Too many are struggling to save the necessary deposits, and not all of them want to buy a new-build home through Help To Buy. More ways of getting more people onto the ladder would help to limit rising rents, increase liquidity and transaction numbers in the housing market, and make the dreams of their own roofs above their heads a reality for many more of the younger generation.”
“The statistics for 2019 encouragingly show that the ‘have-to’ and ‘life-stage’ markets have been carrying on, and we hope that the more certain outlook would encourage many would-be discretionary movers to finally get off the fence.”
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