Since the start of Autumn, there has been a raft of diverging statistics released by various authoritative bodies as to house price growth in the UK.
The Nationwide report that prices rose by 3.2% year-on-year in August, which is the weakest annual pace since June 2013, and marked a slight slowdown from July. However, previously, the Halifax’s survey suggested that annual house price growth was running at 7.9% with strong growth expected to continue. Other commentators have come up with statistics somewhere in the middle of these. However, it is generally accepted that after the rapid growth in prices in 2014, particularly in the south-east, the market would undoubtedly take a breather and fall back in line with earnings growth.
Other factors remain important in influencing the future direction of the housing market;
* The recent wild roller coaster ride in global stock markets, and uncertainty as to whether we are due for a sustained bear market, might encourage buyers to postpone purchases of expensive property where funded from the sale of equities – or possibly boost acquisitions if it was felt that a safe home for cash should be in “bricks and mortar”.
* Continuing forward guidance from the governor of the Bank of England that a small rise in interest rates was due later in the year but is not now likely until later in 2016 as the volatility in the stock markets continues. This should not unsettle the housing market although purchasers may reign in on overspending on their dream home if future monthly mortgage payments substantially reduce their life style spending.
* Mortgage finance remains readily available although underwriters continue to scrutinise a borrower’s ability to repay with strict affordability tests and lenders regularly surprising and disappointing potential home buyers with rejections of their mortgage applications.
* And, finally, the jobs market. Employment continues to grow steadily, or at least not fall back, with some shortages of recruits in the higher paid skills sector across the UK which is underpinning incomes growth and, by association, house prices in certain areas.
All these statistics make interesting reading but a fundamental feature of the housing market is the importance of regional variance and, particularly, local supply and demand. In Warwickshire, we enjoy a desirable environment with a wide choice of historic towns and villages set amidst some particularly attractive countryside with good infrastructure including road, rail and air transport links, strong local employment centres, highly regarded educational facilities, and a wide range of sporting and recreational amenities on the doorstep. This has encouraged steady demand for housing in all price ranges in recent times, including migration from other areas, and house price growth, as we enter Autumn, is likely to remain positive – but at perhaps more modest levels than experienced over the previous year.
Finally, in anticipation of a continuing improving market in 2016, Sheldon Bosley are planning something special for the new year – the creation of a new brand to market a portfolio of town and country homes across our region which are unique because of their character, location, style or size.