Glimmers of hope in the Housing Market
With all the uncertainty swirling around Brexit you would be forgiven for thinking that all is doom and gloom on the housing market front, yet this isn’t quite the case. Buyer and seller expectations over pricing are getting closer – particularly in London – which is translating into more homes being sold. Asking to achieved prices, which reflect the percentage difference between the initial asking price of a home and the price it sells for, is a good indicator of the health of the housing market. Notably, the gap in London is narrowing.
In the first three months of this year, sellers in London achieved 99% of their asking price compared to 96% across the rest of Great Britain. However, this hasn’t always been the case. Towards the peak of the market in 2014, London sellers were getting on average 4% above their asking price but by 2018, and in a slowing market, this fell back to 97% - the lowest it had been since 2012.
While a 2% rise may seem small, this is a metric that is slow to move and any change is significant. It shows that in spite of the chaos surrounding Brexit, London’s housing market has seen a resilient start to the year and it is this narrowing of price expectations that has kept the capital’s housing market moving.
The general feeling is that prices in London are bumping along the bottom and for anyone looking to buy in the capital, now is a good time. Meanwhile, outside London where the market fared a little better last year, the average asking to achieved price lingered at 98% between 2015 -2018, falling back to 96% at the start of 2019.
Despite the slowing housing market across Great Britain, more homes sold in some areas of the country in 2018 than they did the year before. In 52 of Great Britain’s 297 local authorities more homes sold in 2018 than in 2017. Activity held up best in the Midlands and North last year, but despite falling prices in the capital, six London boroughs sold more homes in 2018 than a year earlier. The City of London saw a 69% increase in sales, while Islington (up 0.8%), Kingston upon Thames (0.5%), Harrow (2.8%), Hammersmith and Fulham (1%) and Haringey (0.9%) also saw an improvement.
Initial Asking Price to Achieved Price
Source: Hamptons International