If there were any fears that the UK's housing market might stagnate in late 2014 and early 2015 due to the imminent general election and changes to stamp duty, figures from property website Rightmove would suggest sellers have other ideas. In February, Rightmove published statistics that showed property asking prices rose steadily in the 12 months previous.
In the 12 months up to February 2015, house prices rose in all UK regions. Naturally, the biggest increase was in Greater London which saw a 9.7% hike with the South East following closely at 8.1%. Wales recorded the lowest annual rise at just 1.8%. Across the country, property asking prices between February 2014 and 2015 rose by:
Interestingly, the figures also revealed that between January and February 2015, property asking prices rose by more than £5,000 on average – meaning that the typical house in the UK cost around £279,004 in February.
Rightmove says asking prices have risen over the year, especially between January and February, because of a chronic shortage of homes, flats and other types of property in the housing market. Their analysis shows that over the last two years, there has been a 31% increase in the number of housing transactions, but only an 11% increase in the number of dwellings coming onto the property market in the same period.
The state of affairs is not expected to improve any time soon either due to recent stamp duty changes coupled with record low mortgage rates. Thus meaning that more people will be looking to buy a property in the latter half of 2015. Unfortunately, these buyers may notice an absence of suitable properties in their area because many sellers fear they may not be able to find another suitable property to buy - essentially creating a bottleneck in the housing market.
The lack of supply could also be down to the increase in buy-to-let investors who typically hold on to their properties for far longer than owner-occupiers. The situation may well deteriorate further due to changes in the law which could see retired people take their entire pension and purchase a buy-to-let property to secure a retirement income.
While the shortage of properties is having a negative impact on all potential buyers, it's first-time buyers that are suffering the most. The average asking price for first-time buyers rose by 2.4% in the first two months of this year – up from £163,251 to £167,107. Meanwhile, those buyers looking to purchase their second home were faced with a 1.2% increase – up from £228,541 to £231,317.
In their report, Rightmove quoted estate agents from across the county who all shared the same belief that the shortage of homes in the property market means that first-time buyers are having to bypass the traditional two-bed terraces and consider much larger, more expensive properties that are beyond the borrowing means of most.
Here in Cardiff, property prices are relatively low in comparison to other capital cities in the UK, but that doesn't mean the city isn't suffering from the effects of low stock in the property market. Thankfully, Cardiff Council and the Welsh Government are working hard to tackle the issue and in the next few years, thousands of new homes are expected to be built in the city and its suburbs such as Pontprennau and Lisvane.
If you're a first-time buyer or a property owner looking to upgrade to a larger home, CPS Homes can help. We have hundreds of properties for sale across Cardiff, ranging from Cardiff Bay flats and apartments to large family-sized detached houses in St Mellons. Take a look through our properties and don’t forget to give our friendly team a call if you need any help!