Why the West is starting to sell again
The housing market in the West Country is showing signs of recovery, with estate agents reporting growing sales, despite house sales dropping to a five-year low in Britain.
Figures released by the Royal Institution of Chartered Surveyors ominously claimed that sales have dropped to their nadir, 40 per cent lower than they were in 2007 at the height of the boom.
But while experts and economists could keep arguing about the state of the UK housing market until the next boom kicks in, even a cursory glance at regional evidence shows that the South West is completely contradicting the national picture.
The Land Registry for England and Wales indicates that outside of London, more houses were sold here between January and March this year than anywhere else in Britain. Some housing agents have reported as much as a 40 per cent rise in sales compared to this time last year, completely contradicting the RICS figures.
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Adam Offer is the managerial director for Besley Hill estate agency, which has 15 offices covering Bristol and Gloucestershire. He disagreed completely with the idea that the housing market has frozen.
“Not here, absolutely not. We’re seeing a rise across the board. Sales are up, viewings are up, and people registering to look are up.”
“We’re lucky here that the picture isn’t as bleak as it is nationally. In places like Thornbury, we’re able to sell a three-bed semi with phone calls,” he said.
“What we’re seeing now is the people who are sitting in rented accommodation are starting to see house prices edge up slightly and are deciding to buy. There aren’t that many houses to let and we’re got an issue of supply and demand.”
The average price for a house in the South West is below the national average of £226,887. However, once properties in London are excluded, the average price for a house here of £218,354 makes it easily the most expensive region in the UK. Mr Offer maintains that that is relative to the area and that markets have stabilised, as agents here have only seen a 1.32 per cent increase on average in house prices in the last year.
As ever, first-time buyers are the capitalists of the housing market. Anecdotally, it would appear that many potential first-time buyers are still busy swearing to never leave their parents’ home and checking under their bed each night for negative equity. Yet if positive figures are to be believed, it would seem that first-time buyers are succeeding in getting both feet firmly on the first rung of the property ladder.
Mortgage lending was up to £10.2 billion in April this year, compared to £10 billion last year. Though it may appear to only be a slight increase, that figure still managed to stay up following the end of the stamp-duty holiday for first time buyers in March. Clearly, there is a national trend of first-time buyers successfully getting mortgages. Regionally, Mr Offer claims that the South West again has seen more first timers putting down deposits.
“There’s been a re-emergence of first-time buyers,” said Mr Offer. “The press are saying that mortgages aren’t available. There are good mortgages available; the market isn’t as bad as people are making out. Lenders need to lend to make money.”
Lenders tightening their criteria and being slightly more stringent on credit checks have made getting a mortgage notably tougher than it may have been five years ago.
However, it could be argued that lending patterns seen at the height of the boom can’t be used as a benchmark as easy lending has been blamed as being a major cause of the financial crises.
Samantha Cooper, senior manager at Cooper Associates Mortgage Advisers in Taunton suggests that some first-time buyers might expect the housing market to be easier than it is.
“I think first-time buyers are still reflecting the way things were before the credit crunch,” she said.
“I don’t know if they understand the cost of getting a mortgage and then once first-time buyers get involved they realise it’s a little bit trickier.”
According to the Council of Mortgage lenders, there is a very strong desire for home ownership between 18-24 year olds, with 77 per cent saying they would like to own their own home in ten years, and 40 per cent saying they would like to own their own home in two years.
But, of that same group who said they would like to own a home, only 42 per cent believe it is likely to happen.
“Lots and lots of parents are remortgaging to take out equity to gift to their kids. We’re seeing lots of cases of purely mum and dad paying for the mortgage,” added Mrs Cooper.
“You’ve got the young couples who say they’re finding it difficult, you’ve got the parents who are trying to raise a deposit for their kids who are now living with them, and you’ve got the second time buyers who are waiting for first timers to buy so that they can move on. The fact is, it is difficult for everyone.”