Home comfort at last? Property bounce leads to optimism in the housing market

Having worked 38 Good Fridays, estate agent Andrew Beadnall was looking forward to a quiet day at the office. Barely a soul would walk through the door, leaving him to catch up on paperwork and eat his Easter eggs in peace.

But his expectations were confounded by the busiest Good Friday he can remember, and it marked the end of a month he has christened “mad March”.

“It’s usually deadly quiet because it’s the first bank holiday of the year but we had an absolutely storming day. I’ve been in the job nearly 40 years and I can’t remember anything like it. We’ve alsohad the best March since the height of the property boom,” says Andrew, whose company BeadnallCopley has offices in Wetherby, Ripon and Harrogate.

“Last month we had 60 house sales at a value of over £23 million and they were across all price ranges, from the bottom to the top. I haven’t seen those kind of figures since 2006 and 2007.”

He puts the dramatic upturn down to a growing confidence in the economy and in bricks and mortar.

“It’s the “C” word – confidence, and it’s what the property market spins on. It’s been a long recession, but personal debt has fallen, a lot of people who thought they might lose their job haven’t, and they are fed up of putting their life on hold.

“The budget has also been a big factor. There were soothing words and details of various government schemes to help the housing market.

“There’s also a huge interest in property investment. We held a buy-to-let seminar on a cold, dark evening in Ripon recently, and over 100 people turned up. There’s no doubt that property is now seen as a safe haven.”

A series of packed open viewings and quick sales prove his point, he says. On Saturday, an open day at a £375,000 semi in Harrogate brought 31 prospective buyers through the door and at least two offers. A £550,000 flat attracted 15 viewings in two hours and three people plan to make offers.

Sale prices and new instructions are also on the up. The owners of a house in Boston Spa, which is on the market for £425,000 are considering an offer of £440,000. Another property on at £699,950 went for £727,000. A house in Thorp Arch, near Wetherby, was on at £199,950 and sold for £198,000.

“Vendors are getting close to their asking price and beyond, as long as they have priced their property realistically, which has been virtually unheard of for the past few years when buyers expected a ten per cent reduction,” says Andrew, who admits that the startling performance has been helped by his location in Yorkshire’s golden triangle, an area that is ultra desirable and blessed with hotspots like Harrogate.

His big Spring bounce has not been as mirrored in all parts of the county, though there seems little doubt that confidence levels are rising after a difficult five years. Many estate agents refer to the market “falling off a cliff” in 2008, when the credit crunch followed by recession devastated the property industry. Sales and new instructions seized up, as owners opted to stay put and buyers struggled to get mortgages.

Dave Rawding, of the Larards chain of estate agencies in Hull, says: “We are a long way from the doom and gloom of 2008. Our sales are up 18 per cent on last March, which sounds impressive but it’s 18 per cent of not a lot compared to the boom. I think a lot of it is down to realism. It’s taken a while for homeowners to come to terms with the fact that their property is worth less than it was in 2007 but most now accept that asking prices have fallen in most areas since then.

“There is also more confidence and a slight improvement in lending. All in all I think there is room for cautious optimism.”

Patrick McCutcheon, of Dacre, Son and Hartley, has also seen a noticeable increase in sales, which he says followed on from a buoyant start to the year when there were a substantial number of enquiries. He also credits the annual seasonal upturn.

“Life moves on,” says Patrick. “Homeowners can only defer a move for so long. Babies, marriage and a desire to fly the nest all create pressures that cannot be ignored.”

Kevin Hollinrake, managing director of Yorkshire-based Hunters, which now has branches all over the country, predicts a gradual revival of the market, helped by government schemes designed to encourage banks to release their stranglehold on mortgages. Funding for lending provides cheap funds for banks to lend mortgages at a reasonable rate. The Mortgage Guarantee Scheme, which should come into effect in January, will underwrite the risk of 15 per cent of a loan, allowing people with a 5 per cent deposit to get a mortgage.

“I believe the Mortgage Guarantee Scheme should have a big effect. It will mean banks can lend higher mortgages without taking a risk,” says Kevin.

“For now, Easter trading has been steady and there is more of a spring in people’s step. We are past the worst and there is a bit more confidence but there’s a long way to go before we achieve the level of sales we saw in the boom.”

In 2007, there were 1.6m sales, according to HMRC (Her Majesty’s Revenue and Customs), and 
last year there were 932,000. Surveys and statistics point to 
an upward trend in both activity and prices.

The number of homes sold in Yorkshire reached a three-year high last month, according to 
the Royal Institution of 
Chartered Surveyors, which is optimistic that improved confidence in the market will continue, helped by easier access to mortgages easing pressure on the market.

The latest quarterly Halifax Housing Market Confidence tracker reveals that 45 per cent of people feel prices will rise and only 12 per cent forecast a decline – the lowest proportion in the survey’s history.

Martin Ellis, housing economist at Halifax, says: “There has been much more optimism about the prospects for the housing market over the past few months, particularly as the recent UK budget announced big plans for housing.

“Sentiment regarding the outlook for house prices has improved markedly over the past quarter. This is likely to reflect the modest improvement in house prices nationally over recent months. A clear north south divide exists with significantly higher proportions of people expecting prices to rise in the south than elsewhere in the UK.”

Savills predict average UK house prices will rise by 0.5 per cent this year, while in Yorkshire they will remain static. But according to Hometrack, the property analytics business, Yorkshire prices rose by 0.1 per cent in March.

his small increase is a good sign, according to Richard Donnell, Hometrack’s Research Director, though he remains circumspect about a full-blown market recovery in the short-term.

“The housing market is in full seasonal swing at the moment and there is a sense of optimism emanating from agents and would-be buyers and sellers alike. The overall headline figures continue to be driven by London and the south east with a lack of supply underpinning prices.

“Transaction volumes continue to be at a low and this makes for a volatile housing market. That said market conditions today have changed from a year ago. Lower mortgage rates, as a result of the government’s Funding for Lending Scheme, have helped, supporting increased activity and demand from would-be buyers. But fundamentally, the problems of affordability and deposit levels remain a serious impediment to a full blown housing market recovery.”

Patrick McCutcheon, of Dacre, Son and Hartley, believes that more improvement in the general economy is needed to fuel the housing market.

“Without that we are unlikely to move on to a flight path of continual growth so prices are likely to remain steady for the next couple of years.”

The property performance

Yorkshire house prices rose by 0.1 per cent in March, according to Hometrack’s latest figures.

There was a 1.7 per cent rise in properties listed for sale and a 14.8 per cent rise in sales agreed.

Sellers managed to achieve an average of 93 per cent of their asking price and there was 3.5 per cent rise in new buyers registering with estate agents.

The average time taken to sell a property was 11.4 weeks.

The average UK house price rose by 0.3 per cent the highest growth since March 2010.

Over the last two months the supply of housing for sale has grown by 13 per cent, but over a six month period supply is up just 3.5 per cent. Demand has risen by 19 per cent in the last two months.