Spring has Sprung!

Spring has Sprung!

Sprimg has Spring

As I am sure you have already noticed, the early signs of Spring appear to be appearing, well frankly, earlier than ever! Now whilst the sad fact is that climate change is no doubt to blame for the ahead of schedule (and, whisper it, welcome?) onset of the milder weather and the blooming of Spring flowers, what’s behind the early arrival of this year’s Spring bounce in the local housing market?

In a promising turn of events, the UK housing market has witnessed a significant improvement when it comes to transactions ahead of the Spring moving season. In fact, right across the UK agents are seeing a rise in buyer demand with Zoopla reporting an increase of 11% year-on-year. The better news is that there appears to be real substance to this uptick with sales agreed having increased by 15% during the January and February with that figure being closer to 20% in Scotland. In our own case, and in no small part due to a phenomenal team effort, we have seen an incredible surge with sales up 52% on January and February of an admittedly slow 2023.

Meanwhile, the supply of homes for sale across the UK for is 21% higher than a year ago – a further sign of greater confidence amongst vendors, whilst also increasing choice for purchasers. Our own figures show an increase of 29% in properties brought to market. We expect to see the number of properties coming to market with ourselves and no doubt others increase in the coming months as that Spring bounce really kicks in and news of an improving sellers’ market spreads.

Director Laura Mowat comments: – “It’s encouraging to see a year-on-year momentum within the housing market and these figures should encourage people who were hesitant about selling their home to consider their move. Though interest rates have not started to fall yet, the Bank of England’s last Monetary Policy Committee meeting should give people confidence as they now know that their borrowing costs are unlikely to increase. If inflation falls as expected, we hope that the Bank of England will consider cutting interest rates which will help ease the financial strain placed on the nation.” 

Keiran Newman, senior valuer and property director adds: – “Whilst the housing market might not be back to full speed just yet, it is certainly accelerating, which is shown in the Zoopla figures and the activity that we’re seeing first hand. The surge of 29% more homes coming to the market with us is a really encouraging sign, and this is being met with far greater buyer confidence. We are seeing huge demand for two bed flats and three bedroomed homes in particular although pleasingly the top end of the market for four beds at £300K + is also showing encouraging signs. The 11% increase in buyer demand definitely chimes with the uptick in buyer enquiries that we’ve received, with people encouraged to progress with their property search by lenders bringing interest rates down.”

Sounding a note of caution Keiran goes on: – “Of course, the market isn’t going to be totally immune to some bumps in the road to full recovery. The slight downward trending in UK house price inflation revealed this week may give doubt to some, but this is likely just a result of some lenders inching up mortgage rates in response to a slight plateau in inflation falling. It’s also not true of Dunfermline and the surrounding villages where prices are in fact up a little on last year. Geopolitical surprises aside I fully expect that we will see the base rate come down this year if inflation remains under control. In the meantime, provided people are using a knowledgeable and trusted property advisor who can value a property properly, they can still achieve the best possible price.”

Many will be eagerly anticipating the Spring Budget to see if there will be any policies introduced to support people in buying homes. In an election year it is quite possible that the chancellor Jeremy Hunt will see an opportunity to strike while the iron is heating up and will actively seek to encourage home buying. For what it is worth we remain sceptical when it comes to Government interventions which invariably end up inflating prices and proving a disadvantage to those they are designed to assist. For example, to add to the momentum that the market has gained, we could incentivise older homeowners to downsize by scrapping the stamp duty for older people looking to move into smaller homes, thereby freeing up family homes for the next generation of owners. This could be coupled with a policy to reverse stamp duty for all other property deals so that it is paid by the seller, meaning people are not punished for trying to climb the property ladder and can more easily move into a suitable home for each stage of life. Any such potential changes would of course not apply to Scotland in the first instance as such matters are devolved matters and it would be for the Scottish Government to replicate these in our own Land and Buildings Transaction Tax (LBTT) legislation.

We’ll just have to wait and see whether the government will actually introduce any such measures to support home buying, and for what it is worth we suspect it won’t. Nonetheless, as we head into the Spring, overall, it certainly looks as though the property market is blossoming. We think that we’re on the cusp of the market toppling over once again into a sellers’ market which as ever will see prices begin to rise albeit we believe modestly.

If you would like to just have a chat about the market or arrange a FREE pre-sale valuation call us on 01383 629720.

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