Bognor Regis Estate Agents – Clarkes Estates

What is happening to House Prices?

The Nationwide House Price Index started off the latest ‘house prices are falling’ debate, and gave the ‘experts’ the green light to pile in with their views.  Those expert views included a ‘Brexit’ inspired drop in house prices, the beginning of a new 2009 style recession and other equally doom laden predictions.  All sounding pretty nasty to home-owners.


When it was published last week the Nationwide said that house prices recorded their third consecutive
monthly fall in May – the first time this has occurred since 2009.  Nationwide also said that the annual rate of growth slowed to 2.1%, the weakest in almost four years.  However, we are talking about measuring short term house price changes of just £1,000 on an average price of £200,000+.  It is not an exact science.


However, just a week or so before, Rightmove reported that the price of property coming to market had risen for the fifth consecutive month, up 1.2% (+£3,626) to a new record.  Rightmove measures pretty much the whole market and doesn’t ‘adjust’ it’s results in the same way as some others.


Rightmove also said that typical family homes had seen biggest price rise, recording a 5.4% year-on-year jump.
Meanwhile The Office for National Statistics latest bulletin, based on actual transactions, reveals that average house prices in the UK have increased by 4.1% in the year to March 2017 (down from 5.6% in the year to February 2017). They comment that ‘this continues the general slowdown in the annual growth rate seen since mid-2016’.


So what should you believe?  We trust the evidence of our own eyes on the ground, our Directors having combined experience of more than 50 years of estate agency work – including having worked through three housing market recessions.  Here are some keys facts and our current view – and we see nothing happening right now in the local market to change it:


FACT 1 – markets are very localised, and national figures can be fairly meaningless.  This is increasingly the case in recent years and London is a market quite unlike the rest of the UK.  What happens in London (and prime London) does matter, and tends to ‘ripple out’ but London as a whole does not behave like our local market.  London has been in the grip of a slow down for the last 18 months, driven by a whole host of factors including Government tax policy and the international scene.  If anything, it is now better placed to recover momentum than in recent times.


FACT 2 – all of the indexes produced by mortgage lenders are based on the data from their own mortgage applications.  So each one is a relatively small sample, and is ‘skewed’ by the type of lending they are trying to attract (or avoid) at that moment in time.  What’s more, they tend to ‘seasonally adjust’ and apply other statistical techniques to their results to smooth them out – or make them less reliable depending on your point of view!


FACT 3 – the two biggest factors affecting housing demand in our experience are job security and availability of mortgages at affordable rates.  People tend to look through elections, the endless politicians pronouncements and the like, and get on with their lives if they have a secure job and can get a mortgage.


What About the Local Market?


So, what we are seeing here in Sussex, is that prices are stable or gently rising and demand is very good for family houses, flats and bungalows.  In many instances, we are finding buyers just a few days of new instructions coming on to the market.  The secret as always to sales success is getting the price right with a strong pro-active marketing campaign.


We have been saying for some time that the ‘top end’ market is more tricky, and here accurate pricing is even more important.  Most moves in the top quartile of the market are discretionary, and it is easy for people to put it off for another year and be very selective about finding exactly the house they are after.


Stamp duty is also a real issue for the more expensive houses:-


Did you know? – Government Stamp Duty tax on a £1m house is now an eye-watering £43,750 – that’s almost 4.5% of the purchase price!  A higher rate tax payer would have to earn nearly £73,000 just to pay the tax!


The Government tax changes have hit many investors who would like to acquire their first buy-to-let or add to an existing portfolio.  However, despite this, the right house or flat still remains a very attractive way to plan for retirement or achieve a 5%+ yield on your investment.




We don’t believe that another price-boom is about to come along, but we don’t see prices falling either.  We predict a stable market for the remainder of 2017, with nice quality family houses remaining the bedrock of what we are selling.


In short ignore the ‘experts’ and get on with life.


If you are thinking of a move or would just like to know ‘what yours is worth’ please do get in touch.  We will be happy to provide you with an up to date market valuation, FREE of charge and without obligation.
Best regards


Paul Clarke
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