Guildford Property Market Update - January 2020

Happy New Year to all our readers.

It is at this time of the year that we all look forward to changes for the better and one way to instigate these changes is to move home to create a new lifestyle for ourselves. It will therefore be interesting to see how the result of the General Election and the exit from Europe will boost house sales.

The UK Market
In their latest Property Index, Rightmove forecast a 2% price rise for the UK in 2020, now that there is a little more certainty following the General Election. Whether there is a pent up demand from the last 3 years of uncertainty remains to be seen. This may not appear until the Spring when listings typically increase as the days become longer.

They suggest that demand for property remains resilient but are understandbly worried about the lack  of supply. The number of UK sales agreed so far in 2019 is down by just 3% on 2018, while the number of properties coming to market was down by 8%. There are several factors to suggest that the market should pick up. Interest rates remain low, lenders are competing to lend, there is high employment and wage growth is making housing a little more affordable.

The Rightmove report therefore expects the number of properties for sale will recover as more new sellers come to market to make up some of last year’s lost ground. However lower stock levels are likely to place an upwards pressure on UK house prices.

Another concern is that first-time buyers are still struggling to save a deposit to buy their first home. If they are unable to get a foot onto the first rung of the property ladder this will hinder sales further up the property ladder. Solving this issue would help to limit rising rents and increase transactions in the housing market.

The Guildford Market
Property stock levels in Guildford have continued to fall, whatever the type of property or the number of bedrooms, by 19%, compared to this time last year.

There has been a slight increase in properties available for sale over the last month, possibly due to sellers knowing the result of the General Election and therefore more confident that they will sell this year. A few properties that did not sell last year have been relisted in the past fortnight.

If one were to look back at the year 2007 (pre-credit crunch) the change in stock levels compared to then are even more significant.

The time that vendors leave their properties on the market continues to increase though it is interesting to note that the number of properties spending between 1 and 2 months on the market (whether they sell or not) has decreased. This might suggest one of two things. Either the vendor was
curious to know whether their property might sell and so was a speculative listing; or more importantly they managed to sell.

The average time taken to sell properties in Guildford over the last 90 days has been 154 days, although half of the sales did occur within 78 days.

Asking prices have continued to increase over the past month by between 1-2% ... but have sales prices also increased?

According to the latest data from Land Registry (available up until Oct 2019) over the last 12 months there was a slight decrease of 1.4% for all properties in Guildford. Detached fell by 0.9%; semi-detached by 0.5%; terraced by 1.1%; and flats by 3.7%.

Is this because agents have been over confident in their original valuation, as suggested by the number of properties on the property portals, with reduced prices; or have buyers had success in negotiating prices down? This confirms again that prices can only be determined by what the market is prepared to spend.

See you again soon for next month's property update when we expect to see further certainty assuming there is progress in the BREXIT negotiations; and an increase in property listings now that owners have returned to normality after the festive season.

To request a copy of the latest Rightmove Price Index report featured in this update, please call 01483 320207 or text 07786 965631. Always happy to have a chat about the local property market too.

Guildford Property Market update - October 2019

This month I am taking an in depth review of the local Guildford property market to determine to what degree market and agent sentiment relating to BREXIT has had an affect on stock levels, time on the market plus asking and sales prices.

Here is the video version of the blog.

This is how the market looked in September, 2019.

There is a greater stock of houses in the price range £500,000 to £1,000,000 with 4 bedrooms, whose average asking price was £784,905 compared to other properties for sale. There were slightly more semi-detached houses than detached prices on the market last month too. Might this suggest that owners are wanting to sell in order to upgrade perhaps to a detached property?

Property stock - what is available?
Compared to 12 month's ago the housing stock has definitely decreased, by as much as 30%. This was especially so for flats (31%) and terraced houses (27%).

Asking prices
If you have found a house that you would like to buy does it represent good value for money? Comparing it with the prices in the tables below will help you to determine if this is the case.

Asking prices have increased for all properties overall by 6%, though flats were the only specific property type to see an increase. They increased by 10% with vendors selling all other property types asking for the same, or less than they were 12 month's ago.

What is selling quickest so where is the demand?
There were 412 properties on the market, in Guildford, over the last 90 days, taking on average 135 days to sell although as many as half of these properties took less than 64 days to sell. Those properties between asking prices of £400,000-500,000 typically spent less time on the market than properties in all other price ranges, once again suggesting that this might be the "sweet spot" regarding affordability.

Three and four bedroom houses tended to take less time than other property sizes. This applied to semi-detached properties especially suggesting a higher demand for 3/4 bedroom semi-detached houses in the £400-500,000 price range.

The time vendors left their properties on the market, when unsold compared to 12 month's ago, seems to have increased suggesting they were prepared to wait longer to secure a sale. This applied especially to vendors selling semi-detached properties.

Sales prices - are these going up or down?
House buyers want to know if prices are decreasing to determine whether it will be wise to wait in the hope that prices will continue to fall; or if prices are increasing sellers are typically waiting to sell their home in the expectation that they may be able to realise more for it and therefore move to a larger home later on.

When comparing the most recent sales prices available, in July 2019 with those 12 month's ago these have all increased, except for flats which fell by 5%. Semi-detached showed the highest sales price increase at 9%.

No of properties sold - are properties selling?
There were dramatically fewer sales in July 2019 compared to July 2018. Semi-detached house sales fell by a substantial 63%, detached house sales by 37% and flats by 35%.

In conclusion the market does appear to have slowed, whether this is down to people's uncertainty about the future of the property market due to political reasons, or not. However people are still managing to buy and sell property, even though it may be taking longer to secure a purchase as there is no doubt some have to move, when life changes for them.

If vendors demand they sell for the highest price, and in the shortest time possible then the only way to achieve this is by pricing their property at a realistic price; presenting it so that it becomes desirable to their market; and by creating an effective marketing strategy.

Receive 5 fresh ideas to achieve this by making contact today.

If you would like 5 fresh ideas on how to sell your property call 01483 320207 or email richard.hodgson@newman.uk.com

In the meantime why not visit https://instantvaluation.newman.uk.com/ to perform an online valuation for your home to discover how much it might be worth in today's market.

All these stats are available at https://www.home.co.uk/guides/house_prices.htm?location=guildford

Guildford Property Market update - September 2019

For this month's Guildford property market update I have taken a look at the latest figures available to indicate the state of the nation, as the housing market continues to be influenced very much by national issues such as BREXIT and what possible affects the new PM and his policies will have on the property market, both locally and nationally.

Wages rose 3.9% in the three months to June, the highest rate of growth since 2008 according to new figures released by the Office for National Statistics. Wage growth continues to outstrip inflation, 1.9% in June, the same as in May and down 0.1% on April.

GDP contracted in the second quarter of 2019. This is the first time there has been a fall since 2012. Manufacturing output and construction both fell, and the trade deficit narrowed, following a sharp rise at the beginning of 2019, coinciding with the UK's original departure date from the EU.

UK employment remains at its highest level since 1971. The ONS report 32.76 million people aged 16-64 were in employment in the three months to the end of June. The number of self-employed part-timers has increased to over 1.5 million, more than double 25 years ago.

HMRC reported house sale transaction levels in July were 12.4% below the same month a year ago. It is worth pointing out that the June 2019 figure has just been revised from a 16.5% fall to a 4.7% fall. It is likely that the July fall is not as substantial as is being currently reported.

Nationally there were 7.8% fewer homes for sale in June compared to a year ago, according to Rightmove, with sales volumes 4.6% lower to date in 2019. With demand levels starting to stabilise, the RICS expect some improvement in sales rates at the national level over the next 12 months.

The latest RICS Residential Market Survey suggests market demand is beginning to stabilise. In July demand levels increased for the second month running, following consecutive months of decline since July 2018.

The low interest rate and greater availability of mortgage products might have influenced the number of mortgage approvals. These rose slightly in June to 66,440, above the 60,000 projected in the May Bank of England inflation report. Although buyer interest remains, the average time to find a buyer in July, was 62 days, the longest since July 2013, according to Rightmove.

The latest data available at The Land Registry states the average house price in the UK is £230,292. Property prices have risen by 0.7% compared to the previous month, and risen by 0.9% compared to the previous year.

How does the local Guildford property market compare?

Average property selling prices have continued to increase but only marginally at 2% overall, over the last 12 months.

Most vendors I speak with have been concerned, for whatever reason, that their properties have been taking longer to sell. Current figures suggest the following number of days are taken for homes within a 3 mile radius of the centre of Guildford, to sell.

The number of properties sold in the most recent month for which data is available, compared to the same month last year, has reduced dramatically. Some say this is due to a reduction in the level of seller and buyer confidence due to the current state of the nation so vendors are delaying their decision to move; or extending their homes rather than move to a larger property.

Currently their are 557 homes for sale in the Guildford area with 48 having been added in the last 14 days with an average asking price of £556,692. However a substantial number of property listings have also been removed from Rightmove over the last week suggesting that properties are being sold, even after months of delay.

Source: home.co.uk

Considering the uncertainty the Country has been through in the last three years with the ‘B’ word issue, stock levels and the increase in time to sell might be of concern but as prices are still moving up, albeit by only a small overall percentage, the underlying resilience of the local market does remain strong, as suggested by the long term price increases that Guildford has experienced.

Now looking forward towards the end of the year .. how will Guildford house values change under the new Prime Minister?

Boris Johnson and Brexit are short-term distractions from the long-term issues of the UK property market. Until we start building at least 300,000 properties a year to meet the demand for UK property, demand will always outstrip supply, meaning irrespective of short-term fluctuations that may or may not be caused by domestic and world events, prices will always in the medium to long term remain stable and increase.

First BREXIT, now a lower interest rate ... what is your exit plan?

After much conjecture and rumour we now know that the Bank of England has decided to half the base rate down to just 0.25%, after a period of 7 years in order to bolster the economy following the decision to BREXIT. This will inevitably benefit some mortgage payers and offer little, or no hope, to savers relying upon their nest egg for financial support during their retirement.

Figures produced by the Council for Mortgage Lenders suggest that the amount left to pay on each home loan in the UK is £116,000 and there are 11.1m households paying a mortgage. The calculation that will interest these mortgage payers is that yesterday's 0.25% interest rate cut will save them just £22 on a monthly mortgage bill of £779. The Office for National Statistics (ONS) calculated this figure based upon a typically priced home of £211,000 after paying a 20% deposit. The Bank of England has also put additional measures into place to ensure the banks pass this lower rate on to their customers.

Those on bank rate tracker mortgages will see an immediate affect because their loans vary according to the interest rate that goes up or down in direct relation to the Bank of England's decision to increase or decrease the bank rate. One in five mortgage holders have this type of loan.

The Bank's intention is to reduce savings to encourage consumers and businesses to make purchases and investments to boost the state of the economy. However, those who save their money to generate an additional income, rather than spend are the people to suffer. The current average interest rate on an easy access savings account is 0.65%. If savings are to reflect the reduction in base rate the interest paid on these accounts will fall to 0.4%.

So, for example, if a person has saved £10,000 in such an account, they will receive a measly £40 a year in gross interest, which is £25 less than before the cut. How can you live on that and what can you do to improve your financial returns?

No doubt there are many people in this situation especially here in Guildford where young couples bought their property in the 1970's and now in 2016 their mortgages are paid off; the family has flown from the nest and while they rattle around in their large house are wondering how to seek a high rate of return on their investments. 

One answer is to downsize and therefore take equity from their properties but no doubt this is the money that is sitting in their easy access savings account earning little interest. Secondly, they may have allocated their funds to property for their children helping them onto the first rung of the property ladder, when ordinarily this may not have been achievable without their parent's investment.

It is the combination of low savings rates and the lack of affordability in housing for first time buyers here in London and the South East, that is driving the housing market at present. In this case the answer to low savings rates may well lie in property and making it your investment vehicle.

It is a well-known fact that property typically doubles every 10 years. For those in Guildford it definitely has! My parents purchased a 3 bedroom linked detached house in Guildford in 1962 for £2,000. A similar house in the same street, sold last year for £520,000 which is considerably more.

Realising that this was the best and proven way to invest my savings I educated myself with the UK's leading property investors and became a member of a property mastermind group, sharing opportunities with, and providing support to, other property investors.

So if you are considering an investment decision or would like to have a chat in general about the Guildford property market please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk

56.2% of Guildford voters vote to remain in the EU – what now for the 45,670 Guildford Landlords & Homeowners?

It’s 5.50am as I start to type this article and David Dimbleby has just announced the UK will be leaving the EU as the final votes are counted. 

As most polls suggested a Remain Vote, this came as a surprise to many people, including the City. The Pound has dropped 6% this morning after the City Whiz kids got their predictions wrong and MP’s from the Remain camp are using words like “challenging times ahead”.

.. and now the vote has been made, what next for the 45,670 Guildford  homeowners especially the 18,944 with a mortgage?

The Chancellor in the campaign suggested property prices would drop by 18%. Using Treasury estimates, their method of calculating this was tenuous at best, but focused around the abrupt and hasty increase in UK interest rates, which in turn would raise the cost of mortgages, and therefore lower demand for property, causing a drop in property prices.… and I would say, yes .. that will probably happen. 

Guildford  Property Values
Guildford property values will probably drop in the coming 12 to 18 months – but by 18%? I am sorry but I find that a little pessimistic and believe that figure was rhetoric to get homeowners and landlords to vote in a particular way. 

The iconic Guildhall clock

But the UK property market is quite a monster. Since the last In/Out EU Referendum in June 1975, property values in Guildford have risen by 1894.7%. (This isn’t a typo) and whilst property prices did drop nationally by 18.7% between the peak of 2007 and bottom of the market in 2009, when one compares property values today in the country, compared to that all-time high of 2007, (the period before the financial crisis of the Credit Crunch of 2008/9) they are still up 10.14% higher.

Another Credit Crunch?
And so, notwithstanding the Credit Crunch, the worst global economic outlook since the 1930's and the recession it brought us, a matter of a few years later, the Government were panicking in 2012/3/4 that the housing market was a runaway train.

Now the same Credit Crunch doom-mongers and sooth-sayers that predicted soup kitchens in 2008/9 are predicting Brexit meltdown. Bad news sells newspapers. Stock markets may rise, stock markets may fall, yet the British public continued to buy property in 2009/10 and beyond. Aspiring first time buyers and buy to let landlords dusted themselves down, took a deep breath and carried on buying… because us Brit’s love our bricks and mortar and we do need a roof over our head.

However, as mentioned previously, if the value of the pound drops, in the past UK interest rates have risen to reverse that drop. Whilst a cheaper pound will make your pint of Sangria a little more expensive on your Spanish holiday this year and make your brand new BMW pricier, it will make British exports cheaper which is great for the economy.

And what of interest rates?
Since 2009, interest rates have been at 0.5% to which many people have become accustomed to. So what if interest rates were to rise? Would this be the end of the world? 

Interest rates in the 1986/88 property boom were on average 9.25%; in the 1990’s they were on average around 6.5%; and during the uber-boom years (when UK property values were rising by 20% a year for three or four straight years across the UK) 4.5%. Many of you reading this, in your 50’s and older will no doubt remember interest rates at 15%.

However I suspect interest rates won’t rise that much anyway, as Mark Carney (Chief of the Bank Of England) knows, raising interest rates causes deflation – which is the last thing the British economy needs at the moment. In fact they have been printing money (aka Quantitative Easing) for the last few years (which causes inflation) to the tune of £375bn a month. A bit of inflation because the pound has slipped on the money markets (not too much mind you) might be a good thing.

So while property values might drop in the country, they will bounce back. It’s only a paper loss. It only becomes real if you sell. And even if you do have to sell, again, as most people move up market when they sell, your property might have dropped by 5% or 10% but then the one you want to buy will also have dropped by the same 5% to 10%. This is the best part – you would actually be better off because the more expensive property you would be purchasing would have come down in value (in actual pound notes) more than the one you are selling. 

For example, if you are selling a 3 bed house to upgrade to a four bed, in Guildford, the average asking price for a 3 bed is currently £538,589 and £814,264 for a 4 bed. If prices did fall by 10% then the new house would be £81,426 cheaper and while you might realise £53,858 less for the current property the overall transaction (excluding all sales and purchase costs) to upgrade would be £27,568 cheaper.

The landlords of the 8,522 Guildford buy to let properties also have nothing to fear and neither do the 21,766 tenants living in their properties.

Buy to let is a long term investment. However there may be some buy to let bargains in the coming months as some people, irrespective of evidence, decide to panic. Even if we did decide to pull up the drawbridge at Dover and immigration stopped today, the British population will still increase at a rate that will exceed the current property construction level. 

Britain is building 139,600 properties a year, but according to the eminent ‘Barker Review of Housing Supply Report’, the country needs to build about 250,000 properties a year to even stand still. 

As the birth rate is increasing, the population is living longer and just under a quarter of all UK households now are occupied by a single person, demand is only going to go up whilst supply is stifled. Greater demand than supply equals higher prices. That is definitely a fact.

So, what will happen next?
Well, there are many challenges ahead, it would seem. The country has spoken and we are now in unchartered waters – but we have previously endured a couple of World Wars, an Oil Crisis, Black Monday, Black Wednesday, 15% interest rates and a Credit Crunch … and still we survived! 

And the value of your Guildford  property? It might have a short term wobble… but in the long term - it’s as safe as houses regardless.

So if you are considering an investment decision or would like to have a chat in general about the Guildford property market please call 01483 320 207 or email richard@guildfordpropertyblog.co.uk