Author: Antony Antoniou

Average house prices in the UK grew by 2.9% in February compared to last year, according to Rightmove.

The latest figures from the online property website revealed that average house prices have risen by £2,589 over the past month, a 0.8% monthly rise. It means the average price of a home in the UK was £309,399 in February, just £40 less than the all-time record average UK house price that was set in June 2018.

Rightmove said this latest surge to near-record prices was helped by another record 152 million visits on its site in January, with 12% more agreed sales last month compared to January 2019. Rightmove’s data was based on the asking prices of more than 108,000 properties, or around 95% of the current UK housing market.

“There is a boom in buyer activity outstripping the rise in the number of new sellers, which we expect to lead to a series of new price records starting next month,” said Miles Shipside, director and housing market analyst at Rightmove. “This means that spring buyers are likely to be faced with the highest average asking prices ever seen in Britain.

“Buyers who had been hesitating and waiting for the greater political certainty following the election outcome may be paying a higher price, but they can now jump into the spring market with renewed confidence.

“After three years of Brexit uncertainty, dither and delay, many now seem to have the 2020 vision that this is the year to satisfy their pent-up housing needs. Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.

“It’s the first time for over a year that we have seen any sign of a return of seller confidence, albeit lagging behind the surge in numbers of early-bird buyers. Owners coming to market this spring face the best selling prospects for several years, with good demand for the right properties at the right prices.

“However, sellers should be careful not to get carried away with their pricing, as this is still a price-sensitive market with stretched buyer affordability. Those who over-price risk missing out on the window of increased activity that could run at least until we approach the next Brexit deadline at the end of the year.

“Now could be an excellent time to get on the market and sell, seizing the opportunity of achieving a quick sale at a decent price.”

Lucian Cook, head of residential research at Savills, said: “Since the election, we’ve certainly seen a significant uptick in new buyer demand in the prime market which creates a real opportunity for sellers while stock for sale remains relatively low.

“Increased confidence is translating into increased activity, both in the prime market and across the wider market as a whole. It is clear that the market remains largely dictated by sentiment. Our own agents are reporting that the vast majority of buyers remain unwilling to increase their budgets.

“Accordingly, our advice remains that sellers need to remain pragmatic on price, particularly given some of the uncertainty around an impending budget, the first of the new government.”

A new study suggests cash buyers secure lower sale prices than mortgaged purchasers – but is that really the case?

The survey by comparison site GetAgent looked at the average price paid by cash buyers over the last 12 months and compared it to buyers with mortgages.

The data shows that across the UK the average paid by cash buyers over the last year was £220,100 – nine per cent cheaper than the average  paid by buyers with a mortgage,  £240,758.

“Cash buyers are preferable to many sellers because they provide a much simpler transaction with fewer hoops to jump through and often come without a complicated chain. The flip side of this convenience is that cash buyers have a far stronger position when it comes to negotiations and often sellers will accept a more sizeable reduction for the speed and convenience of a cash sale” says GetAgent founder and chief executive Colby Short.

However, what isn’t clear from the research is whether the homes bought with cash were smaller or in less desirable locations – thus contributing to the lower price.

Downsizers, for example, typically make cash purchases of smaller homes using the proceeds from the sale of larger properties; younger buyers seek larger and dearer properties as their families grow and statistically are more likely to have mortgages.

Colby says cash has become more significant in recent years for a variety of reasons.

“Brexit uncertainty left many on the fence and so those looking to sell have had to do so with a lower price expectation due to a dwindling level of buyer interest. Therefore, finding the golden ticket of a cash buyer with honest intentions in a market slowdown has prompted an even greater tendency to sell with a greater cash discount in order to get a sale over the line” he believes.

“At the other end of the transaction scale, the continued affordability of borrowing money due to low interest rates has seen many aspirational buyers commit to a greater sum than they may have otherwise.”

In the GetAgent analysis, the gap between cash and mortgaged purchases was highest in the North East and North West, where properties bought with cash go for 12 per cent less, while London is the only region where cash will cost you more – six per cent more than the average price paid by a mortgage buyer.

A high profile and widely-respected estate agent is predicting a huge demographic change to one of the country’s wealthiest enclaves – Mayfair.

Peter Wetherell, whose agency Wetherell entered into a partnership with London chain Dexters at the end of last year, says Mayfair is about to see its largest demographic and property change of profile for 100 years.

For example, Wetherell says the area’s attraction to Middle Eastern buyers – especially interested in new-builds – is now changing as more buyers come from mainland China and Hong Kong.

In addition, Mayfair is appealing to a younger demographic, with international buyers often being Millennials or even younger. “For example a one bedroom apartment at Clarges Mayfair [was] … let last year for £30,000 per month to a young Millennial with the deal agreed in less than 24 hours” says a statement from the agency.

He says by just next year almost 50 per cent of all residents in Mayfair will be 21 to 44 and by 2030 almost one third of all residents will be Digital Natives – that is, those born since 1995.

On more everyday matters such as the state of the market now, Wetherell says the Boris Bounce has been seen even in the rarified atmosphere of Mayfair.

Following three years of political uncertainty, the average pound per square foot values for second-hand stock are now at levels comparable to the end of 2013.

Some 51 per cent of sales last year exceeded £2,000 per sq. ft. compared to 18 per cent reaching that price threshold across the rest of Prime Central London.

Wetherell predicts that sales volumes of second-hand properties could increase by up to 50% over the coming year, prompted by limited stock and pent-up demand.

Currently, up to 75 per cent of the second hand market in Mayfair is priced up to £5m with a fifth of sales last year registered above £5m.

Wetherell says that in the last decade new landmark developments offering luxury apartments and state-of-the-art residents’ amenities have achieved between £5,000 and £7,000 per square foot.

“Additionally, these new modern developments can sell at values over double that of average Mayfair prices, leading to a comparative value uplift for properties in close proximity to the new developments. Demand for these homes is set to rise as new planning policies will restrict future developments, creating a very exclusive buying opportunity” says the agency.

“Mayfair residents are increasingly younger and seeking a high-performance lifestyle, with leading developers and global brands reacting to this to further enhance Mayfair’s amenities and lifestyle offerings. Whether you are looking to buy or rent, it is clear that people want to live in Mayfair and its appeal will continue to grow this exciting decade.”

The government will not announce a Mansion Tax at next month’s Budget.

It was first reported by the Sunday Telegraph a week ago, quoting two separate sources saying the idea was being considered by both the Treasury and 10 Downing Street.

On the same day Housing Secretary Robert Jenrick appeared on Sky TV and declined to rule out the possibility of a Mansion Tax.

But what a difference a week makes.

This morning’s Sunday Telegraph reports that Boris Johnson personally has vetoed the proposal.

Estate agents and Conservative politicians criticised the idea, and it has now emerged that Sajid Javid – the former Chancellor who resigned on Thursday – had been told by a senior backbench MP prior to the Cabinet reshuffle that many Tories were up in arms at the prospect of such a tax.

It is also revealed in the Telegraph that the Treasury wanted next month’s Budget to include a pledge to undertake a nationwide revaluation of homes.

This may have resulted in sharply higher council tax for many home owners.

However the newspaper understands that this, too, has been scrapped and will not be announced at the Budget.