Looking below the headline numbers within our local markets, there has been consistently strong performance across the board with only minor differences in price growth. Ten years ago, Lightwater was the most expensive local market and recent sales reveal that it retains the top spot today. Each and every one of our local markets has benefited from stronger price increases than the Surrey average over the last ten years.
Recent trends: 2015 another strong year
It’s clear that, despite the challenges, the overall picture for the property market in the last decade is a positive one. Returning to the present, how is the market looking now? Reassuringly, 2015 continued to be a good year for local housing markets, with average prices increasing by 11%.
Looking at the price growth of different property types, it is interesting to see that the strongest performance has been for flats and terraced houses (the less expensive parts of the market).
Despite rising prices, our markets still offer better value for money compared to other parts of Surrey. At a time when high prices and stretched affordability are increasingly commonplace, locations that offer better value for money will come into sharper focus.
Revisions to the way stamp duty is charged have helped reduce the costs of buying a home for the majority (in our area 98% of transactions in 2015 benefited from lower stamp duty charges). The first quarter of 2016 has started very positively with more homes needed to sell due to the continued high demand from buyers in all price ranges.
Outlook: More buyers than sellers pushing prices higher
The property market in the run-up to Christmas was busier than normal and it has remained buoyant into the new year. A key trend is the imbalance of willing (and ready!) buyers against a very limited number of vendors. Our figures suggest that behind every seller is a sizeable queue of enthusiastic buyers. Research from the Royal Institute of Chartered Surveyors ties in with this view. Their data for the south east shows that the stock of property for sale per surveyor is at its lowest level since data was first collected in 1994. This demand and supply imbalance is likely to continue to drive prices higher over the coming months.
The levels of strong activity that we are witnessing reflect forecasts for the UK housing market, which expect a further 5% price growth in 2016. Interest rate rises are on the horizon, although expectations for the first rise have been pushed back further. Increases are likely to be slow and steady when they do occur, which will help households adjust to rising mortgage payments after seven years of historically low rates.
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