November 27 2014 Latest news:
Sunday, January 12, 2014
Experts say there is the “right ingredients” for a positive year
The stranglehold that the economic downturn has had on the housing market during the past five years could be ending.
Property experts have pointed to a continuing rise in both house prices and sales transactions during the second half of 2013 as a key indicator for a positive future.
And there is much optimism for continued progress in the housing sector in Kent during 2014.
With the UK economy slowly showing signs of a recovery, news that the property market is in a healthier state is set to encourage would-be buyers and sellers to make the leap.
Kent County Council’s cabinet member for economic development, Mark Dance, revealed there had been a 25 per cent increase year-on-year in the amount of property transactions going through in the county.
The county has seen more than 20,000 sales during the most recent four quarters – the highest 12-month period since the recession took hold in 2008.
He said: “Kent’s housing market shows strong signs of good health, with transactions increasing and prices stable. It looks increasingly attractive to households financially excluded from the London housing market.”
The South East topped the regional table in November 2013, with more than 300,000 applications to the Government’s Land Registry Office.
Property giant Rightmove this month revealed that average house prices in the South East – not including London – during December were also up 5.7 per cent year-on-year, moving from £297,000 to £303,000.
This rise in prices has been predicted to continue into this year.
A spokesman for the Government Office for Budget Responsibility said: “The housing market has picked up more strongly than forecast in 2013.
“House prices [across the UK] increased by 3.8 per cent in the year to September, while the volume of property transactions was up 22.6 per cent.
“Our house-price inflation forecast has been revised up significantly, reflecting the momentum in house prices this year and supportive mortgage financing conditions.
“We expect house-price inflation to be 5.2 per cent in 2014 and 7.2 per cent in 2015.”
Kent has seen a rise in house prices of 3.5 per cent from November 2012 to November 2013 and the county’s property experts say this is down to the increased demand from buyers.
John Woodhall, area sales director for Your Move, believes 2014 has “the right ingredients” for further house- price increases and a more fluid
He said: “There have been a lot of people who have made the decision not to buy but to rent over the past four or five years, and that has created pent-up demand.
“As soon as there is evidence of house prices increasing in 2014, the consequence is that people don’t want to miss the boat.
“So they think it’s time to get moving and so create more demand, but we need more supply [sellers].
“If there are lots of buyers with too few properties on the market… the house prices go up.”
Rightmove director Miles Shipside believes more properties need to be put up for sale in Kent for the market to grow in tandem with rising house prices.
He said: “As the momentum of recovery increases, areas with the largest shortages of fresh property supply are likely to see more substantial price rises, with the South East among the regions where listings are most scarce.”
It is widely believed that the demand for housing in Kent has also significantly increased due to people moving out of pricey London to cheaper commuter sites in the county, making use of improving infrastructure.
Your Move’s Mr Woodhall said: “Kent is always going to be a hot-spot because of its accessibility to London.
“The worst-case scenario in Kent is that you can get to the capital in one hour and 30 minutes from as far as the east coast. There is a real property buzz across the area.”
However, he does not think that the landmark introduction of the High Speed 1 train service has had the effect of attracting buyers to the county first thought.
Mr Woodhall said: “I don’t think it has had a significant impact, because it is expensive and goes into the wrong station for a lot of Kent commuters. It is definitely positive, but I don’t think it’s had a significant impact on house prices.
“It has been most effective in Medway, where it has cut times, and in the Northfleet area, but further into Kent I don’t believe it has.”
However, there are some areas of the county that have clearly benefited from transport links, with places like Thanet and Ashford becoming more desirable commuter locations.
These areas have witnessed a boost in property transactions and a regeneration of a competitive housing market, with some properties being snapped up just hours after being put up for sale.
Cllr Dance described Ashford as “bouncing back strongly” in recent months, while Mr Woodhall said that in these hot-spot areas houses could sell at high speed.
He said: “There is certainly competition now – if a property is correctly priced and in the right location, there will be more than one buyer interested in it.
“This can result in a bit of a bidding war and the price inflating above the asking price. Houses are selling quickly and we are expecting demand to increase further into this year.”
The county has also been seen by many as an ideal location for commuters because of its wide range of housing and array of prices.
For example, Cllr Dance said an average house price in Sevenoaks was £409,976 while at the lower end of the spectrum the average house price in Thanet was £181,531.
This has meant both incoming commuters and property investors keeping an eye on the county.
Medway has become a popular location for those looking to invest in a buy-to-let property.
Your Move’s Mr Woodhall said: “Medway is following the trend of Kent also. We are seeing house prices improving and demand is good.
“The towns are always seen as a more affordable location for people on the train line into London.
“And it’s popular for people to buy to let there as well because there is a big student community to rent to.
“It’s become a popular place for people to invest.”
With banks becoming more wary of lending during the recession, the rental market has become increasingly strong.
But will this new increase in sales transactions mean that the lettings sector is set for its own downturn?
Mr Woodhall doesn’t think so.
He said: “The rental market is something a lot of people are speculating over. Traditionally, these markets are countercyclical, so if the sales improve, the lettings calm down.
“But we haven’t seen any evidence of this yet, however.
“There will still be lots of people who would love to be a homeowner, but they don’t have the access to borrowing, so I still think there will be a very healthy demand for rental properties.
“I wouldn’t think there will be a significant change on the rental market, but time will tell.”