West Midlands house prices boom as demand for property surges.
House prices are up 4.1% year-on-year in the region as Britain’s advancing property market pushes prices to record highs. The July Rightmove House Price Index, the largest monthly sample of residential property prices, has revealed Britain’s property market is experiencing an unexpected ‘mini-boom’’.
The July Rightmove House Price Index, the largest monthly sample of residential property prices, has revealed Britain’s property market is experiencing a ‘mini-boom’ as prices have been pushed to a record high.
– The average asking price of property coming to market in Britain hit a record high of £320,265 in July, 2.4% (+£7,640) higher than in March pre-lockdown, with a 3.7% annual rate of increase – highest since December 2016.
– Year-on-year buyer enquiries are up 75% in Britain since the start of July.
– The number of monthly sales agreed is up 15% in England on last year, and in the five days after the stamp duty holiday announcement it jumped to 35% up on the same day a year ago.
Miles Shipside, Rightmove Director and market analyst commented:
“The busy until interrupted spring market has now picked up where it left off and has been accelerated by both time-limited stamp duty holidays and by homeowners reappraising their homes and lifestyles because of the lockdown. The strength of buyer demand has contributed to record prices, with the 3.7% annual rate of increase being the highest for over three and a half years. These figures are the earliest indicator of house price trends. They show on average prices gently rising not falling, and this will be reflected in the coming months.”
Why is this important?
The report highlights that ‘The price of property coming to market is an accurate early indicator of demand, evidenced by Rightmove’s unique buyer enquiries currently being up by 75% so far this month compared to the same period a year ago. The number of sales being agreed so far this month is also exceeding the prior year’s figures in all three nations.’
What does this mean for you?
Our Prosperity Covid-19 report forecasted a ‘hiatus in the housing market that would not necessarily affect longer term prospects’. We believed that suppressed transaction activity would result in a build-up of latent demand which would ultimately drive the market recovery. The market is proving that forecast accurate.
We believe the market will now revert to our long term assumptions of price growth being driven by fundamentals of supply and demand at a town/city specific level, local regenerative investment, infrastructure projects, and lifestyle changes in residential demand. As opposed to price rises being driven broadly by a persistent low interest rate environment.
We feel the lockdown experience means we are unlikely to see a return to conventional office working practices until 2021. Tenant surveys had revealed an increasing value placed on reduced commutes, access to green spaces, and comfortable properties with desk space available. Covid-19 only served to exacerbate trends already under way.
We at Prosperity had factored these trends into our site acquisitions and development plans. Meaning the projects we are now offering our clients will be perfectly placed to satisfy future tenant demand. The Rightmove Price Index data is a clear reminder of the fundamentals of UK property. The systemic undersupply and continued increases in demand mean we are confident in the resilience and capital appreciation potential of UK property and our targeted opportunities in particular.