The property market has once again proven to be a rapidly changing environment. The Haslams Market Intelligence Data and the Haslams Price Index suggest that the end of the Stamp Duty holiday, a lack of available properties and the improved weather have all contributed to a softened rate of enquiries for properties. However, since the arrival of “freedom day” and the increased travel opportunities may signal another turning point in the market, with people considering what their new normal for schools and work will look like.
Residential Sales
The good news for homeowners who are thinking about their next move, the Haslams Sales Price Index indicates an overall average increase in value for family homes, both compared to the previous quarter and the same period last year. For example, 4 bedroom houses in Shinfield, Calcot and Earley all increased by an average of £5000 in just 3 months. The areas with the most significant overall surge in value are Earley and Caversham.
The trend this quarter indicates people looking for larger properties and the evidence continues to suggest that people are interested in more space from their next move. As the supply dwindles, but demand remains high, there exists a challenge for movers. Results from the latest RICS Residential Market Survey show a wide disparity between buyer demand and supply across the market. New buyer enquiries recorded a net balance of +32% causing the gap between purchasers’ enquires and new instructions to be at its widest since November 2013.
Lettings
In contrast to buyers, the surge in demand for properties versus the lack of supply is good news for existing landlords and investors. The likelihood is that prospective purchasers will be choosing to stay put for longer, until a suitable property becomes available, thus staying within the rental market. We recently achieved another record month, letting more properties than any other agent, which shows the high level of demand for rental properties in the area. This has also driven the majority of rental values returning to pre-COVID levels; the average 2 bed property in Reading is now £1,067pcm and for all property types the range is from £700pcm to £2000pcm depending on location. Tenants are open to paying a premium for properties with plenty of outside space or an area inside which is suitable for home-working or studying.
New Homes Sales
Haslams Market Intelligence Data shows that the current average reservations for new build developments in the local area was 6.2 units per month, at a ratio of 10.6 visitors to 1 reservation, however there has been a wide range in this ratio. Premium town centre apartments are popular as they offer outside space whilst remaining well-connected. Most of these purchasers are first time buyers, who can take advantage of a number of incentive schemes for purchasing their ideal property and can see the benefits of remaining in the town centre in a vib rant post-lockdown world.
Changes to the Help to Buy threshold now mean that 30% of properties would be eligible, compared to the same period last year where 77% of properties were eligible. Fortunately the current government 95% mortgage guarantee continues to present an opportunity for individuals or young couples to buy which has a higher cap of £600,000. A recent study from Rightmove suggests that around 1 in 5 first time buyers (17%) say they are already using or are planning to use the 95% mortgage guarantee scheme – however in Reading we would expect this to be higher.
Summary
Overall the last quarter as demonstrated growth that was stronger than expected, fuelled by the various buying incentives on offer and the so-called “race for space” that has seen prospective homebuyers seeking an upgrade. For vendors, the time to strike is now and for those with an investment property portfolio, our recommendation is to discuss what returns your properties could be achieving.