Prices in our market place continue to grow on an annual basis, although monthly growth is slowing. Both Ryedale and Hambleton saw negative monthly growth in May of -6.9% and -2.1% respectively. The strongest annual growth in the region was in Richmondshire, where year on year growth was recorded at 21.8% in May. (ONS)
There is an acute lack of stock coming to market to satisfy the surge in demand brought about by the Government’s Stamp Duty stimuli and pandemic induced work and lifestyle changes. Aside from London, the whole of England and Wales at a regional level has between 1.7 and 2 months of property stock left to sell. Yorkshire has 1.9 months of stock currently on the market. (TwentyCI Q2 Report 2021)
The highest levels of demand growth have been experienced by the highest priced properties, where properties above £750k have experienced an 83% growth rate from 2019 (TwentyCI Q2 Report 2021). Conversely stock is down across the country by about 34% according the RICS’s most recent report. This continuing disparity between supply and demand is pushing prices to new levels.
We believe the exodus of buyers from urban locations, looking for increased living space and a better standard of home life, will naturally subside. It seems unlikely the levels of home buyers changing their lifestyles, recently encouraged by significant savings of stamp duty, will continue at the same rate. This combined with stock levels building as the Covid restrictions are eased on 19th July will result in a slowing of house price growth across the board towards the end of the year.
Other key factors influencing the market is inflation and the general fragile economic recovery we are experiencing. Yael Selfin, the chief economist at KPMG UK, suggests inflation will peak at 3% by the end of the year, however believes “the prospects of cooling inflationary pressures next year, as firms adjust to new levels of demand, should provide the Bank of England with room to keep interest rates unchanged for a while longer.”
We are convinced now is a real opportunity to sell for a premium, which perhaps will not be available next year and are encouraging sellers not to delay. How does this leave buyers? Inevitably if committed buyers are keen to secure a new home, they must be prepared to accept the current market. Whilst there may be more stock as the year progresses, it seems unlikely we are going to see the huge fall of values last seen as a result of the credit crunch, ruling out significant discounts by waiting on the market.
Ben Pridden gives our clients the best advice in these extraordinary times and is passionate about property. If you would like a conversation about selling or buying a house, please do contact Ben on 07821 163071