Compared to last year, Hamptons International has been reporting a 63% increase in the number of property buyers, with almost twice as many actual sales.Although the ‘economic gloom’ still permeates the UK economy – confirmed by the last GDP figures detailing the unexpected persistence of the recession for yet another quarter – hope is still at hand, especially in the housing sector, that we may have steered away from this course.
In the latest quarterly research by Hamptons International Property Price Tracker, it has been revealed that a 5.3% increase in sale prices took place across Q2 and Q3 this year with capital gains for the London market partially higher than the wider market, which stayed at 6%. The increase in prices are still being ushered by a scarcity in supply – the gap between who wants to buy and who wants to sell far wider in 2009 than in years past. Measuring up this competitive environment, it has been found that the average ratio of buyers per seller has gone up at 8.8 in the third quarter of this year, an increase of 52% on the 5.8 figure we saw for applicants per vendor in 2008. The volume of transactions continue to be superior in 2009, the current exchange numbers being 76% higher than the previous year.
The demand for property has led capital values up for two consecutive quarters in 2009, with an 8.6% rise in average prices. Compared to 2008, prices are currently in optimistic territory, up 2.1%. Dearth value has put larger units as well as units in prime locations up by more than the average for the wider market – significantly more in some instances. These results are backed by Rightmove’s latest survey on
houses for rent and sale, confirming the lack of fresh properties pushing asking prices 0.2% higher on the year – the first yearly rise for such prices since June 2008.
With transaction levels on the rise, sales per surveyor increased to 18 in the past three months, the RICS (Royal Institution of Chartered Surveyors) reports. The keenly watched sales-to-stock ratio also went up in September, a substantial indicator of the take-up in market slack, which is often seen as a leading gauge of price directions.
An estimated £38.9bn in gross mortgage lending has taken place in Q3-2009, the Council of Mortgage Lenders reports. It means an 18% increase for Q2, but at the same time a 36% decrease compared to the same period in 2008. This confirms recent reports that the retail mortgage market is witnessing a rise in activity but for this progress to go on uninterrupted it will depend on wholesale money markets. It is hopeful to see some UK institutions under a restructured finance issuance supported by mortgage securities – another optimistic step towards more liquidity across the sector.
The gulf between achieved exchange prices and asking prices has come down throughout 2009. The competitive bidding for a number of properties is ushering a distinct closing of this disparity. Recently, the average
London property deal exchanged within 6% of the original asking price and the gap is steadily narrowing. The prospect for a swift turnaround in the economy is frail but the relatively insecure economic position in the UK seems to be partially softening.
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