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House prices stabilising post-Covid, says agency MD

Fine & Country boss says this is the 'new normal' with constrained supply and the search for space an enduring legacy of pandemic.

Richard Reed

House price growth is stabilising as life returns to some semblance of normality – but buyer demand is still higher than normal.

That is the verdict from up-market agent Fine & Country, which says the search for bigger homes and bigger gardens is also still very much in evidence.

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Nicky Stevenson, MD, Fine & Country

“Independent forecasters expect prices will end the year 5.8% higher than where they started, with price growth of 3.9% predicted for 2022,” said Managing Director Nicky Stevenson.

“Although it has fallen from the heady days of the spring, buyer demand remains above normal levels. At just under 74,500, the Bank of England reports monthly mortgage approvals in August were at their lowest level in over a year, but still over 10% higher than the long-term monthly average recorded between 2015 and 2019.

“According to the Dataloft Demand Index, demand for property in September was 12% higher year on year, with few signs of any significant drop off as autumn takes hold.”

Search for space

According to Stevenson, the search for space is set to be a legacy of the pandemic, with many homeowners still taking stock of their current homes and lifestyles as they readjust to new hybrid working patterns.

She says annual price growth of 8.3% in the prime property markets of England and Wales has pushed the average price of a prime property to over £1.15 million.

However, while demand remains high, supply continues to be constrained. “There is little sign of any substantial change to the shortage of supply that has beset the market since the start of the year. According to RICS, stock levels per agent remain historically low,” added Stevenson.

Rise in interest rates

“Zoopla has reported that compared to 2020, the year-to-date volume of homes for sale is 28% lower and the flow of new supply some 5% lower.

“Home movers who have already sold subject to contract, cash purchasers and first-time buyers are in the best position to benefit from such a competitive marketplace.”

Looking ahead, she notes that consumer confidence has been pared back in recent weeks, a result of concerns over the rising price of food and fuel and the end of government support via the furlough scheme.

She adds that rising inflation, although likely to be temporary, may lead to interest rates nudging higher over the final quarter of the year, with the Bank of England’s Monetary Policy Committee set to have two further meetings before 2021 draws to a close.

October 15, 2021

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