2014 – what’s the story?

2014 is already proving to be a much better year for the UK property market.

But what do we mean by a ‘better year’? Basically – more stock, more transactions, more people moving. More people will be putting their properties on the market so that they can move for any number of the reasons that people want to move house e.g. work, family, retirement etc.

But there is still not enough stock to supply demand, and prices will continue to rise in areas that are fashionable and popular – and not just in London, the Country market is facing similar pressures.

But is there a bubble? The answer is yes AND no. In prime Central London and Prime Residential London, it’s still nuts. A 30% rise in achieved values over 2013 makes limited economic sense. But as my Economics Professor said, ‘if you want to make money, study Psychology rather than Economics.’

Outside this bag of postcodes, the UK property market remains pretty STEADY. The biggest impact on value is inflation, which many believe to be considerably higher than the measures used by the Bank of England, so growth in values outside Central London is generally continuing to be matched or eroded by inflation.

Central London and not-so-Central London defied all expectations over 2013. Prices rose and properties sold fast. Not so the rest of the country – and those looking to move from London to the Country are being presented with a once-in-a-generation opportunity to swap a moderate London property for a spectacular rural home. If you are planning to make the London-to-Country move in the foreseeable future, you want to start getting ready now.

From a buyer’s point of view, vendors have absolutely no excuses for asking excessive prices now. Vendors, please, please, please no more silly asking prices. Speak to your local estate agents. Trust their judgement as to the price your property will sell at.

Competition for limited good stock will be fierce over the rest of 2014 both in London and the Country. But buyers should not be over-enthusiastic – paying over the odds should only be considered for the very best in class. However, at last, a trickle-turning-to-a-flow of the Quantative Easing cash seems to be making it’s way through – buyers are finding it a little easier to secure mortgages with reasonable rates and terms.

There is a real divide between London, Commutable Country and the rest of the country. As forecast, internal domestic intra-London activity has strengthened with strong demand for family homes and flats in the residential areas of London – for example, the Nappy Valleys of SW London are seeing properties at all levels sell fast.

We are seeing better activity in the Country. There is money from property sales coming out of London and making it’s way into the Country – and we expect an increase in Londoners cashing in on good London prices and moving to the country over 2014. As usual, the M3/M4/M40 corridors and the West Country are strong. We see no dwindling in demand for quality Country property.

The property market is about people, and people have to move house – there are now over 4 million properties that might have been expected to change hands since 2007/08, which haven’t. Mainly because they haven’t come to the market.

A great many houses are potentially for sale, but not on the market, and there are unlikely to be as many properties openly available for sale as people expect. However, many properties are being ‘marketing quietly’ e.g. agents are seeing what interest there may be in a property, without going to the expense of marketing and brochures, or even placing it on a property portal.

The clever vendors are aggressively marketing their houses with good agents at the right price – a keen, competitive, fair and reasonable price. Our advice to sellers would be – ‘be realistic’.

If you are selling and buying, start looking for your new home now, and certainly from the moment that your current property goes on the market. On the assumption that most people have to buy AND sell a property, it’s a good time to be moving. And for those living in London, a generational opportunity to buy that home in the Country.

To hear more, contact us and our local offices.

James Greenwood