Latest figures show both house prices and property transactions are up. While this is positive news for the industry, such high demand creates issues for homebuyers, according to leading conveyancing solutions provider SearchFlow.
The HMRC’s latest numbers have shown that residential property transactions increased by 4.7% between May and June. Meanwhile Nationwide’s House Price Index for July indicates that house price growth is on the up, with the UK annual average house price having increased by 3.5%.
This research is reflective of SearchFlow’s Conveyancer Sentiment Survey. The results reveal that solicitors in the conveyancing industry have seen an upturn in instructions in 2015. And their optimism is high, with 44% expecting the market to improve by the end of 2015.
“The property industry has had a turbulent start to the year, mostly caused by the General Election. But momentum is certainly building,” comments SearchFlow’s Managing Director, Greg Bryce. “And there are a number of catalysts for this.
“The Chancellor’s changes to Stamp Duty Land Tax have meant buyers can be more nimble with their property purchases, sellers are likely to get a good return on their investments, the buy-to-let market is strong and help to buy schemes have been extended. Last, but by no means least, despite some High Street lenders increasing their rates in the last month, mortgage rates are some of the best we’ve seen in recent years, making it more attractive for people to move.”
Although interest rates are anticipated to rise slightly at some point in the short to medium term, Greg isn’t too concerned with the consequential impact on the market. “If Bank of England rates do increase, it isn’t likely to be a significant rise and will not necessarily bring the housing market to a juddering halt. I would expect there to be sufficient resilience within the market to withstand a rate rise which will result in rates being at levels which remain historically low compared with some we’ve seen over the last 25 years.
“What consumers do need to be conscious of however is the impact of this increase in demand on supply. Now is a good time to sell but it is tough for buyers to find a property which fits their criteria. Certainly in popular areas, homes are being snapped up quickly – it’s a dog-eat-dog world sometimes – and there aren’t enough new homes under development to meet this growing demand. It’s worth bearing all this in mind when it comes to the implications on the wider chain.”
Greg concludes, “The property market is in a good place at the moment. And while we continue to track its pace, the confidence among solicitors can be reassuring and means the remainder of 2015 is promising for homebuyers.”