Who’s Predicting What For 2017?
We think it’s a brave person that looks to predict the future events of any property market, let alone one that is post-Brexit. It was fair to say that activity levels took a slight downturn towards the end of 2016, although the quality of instructions and applicants remained high. In fact, we agreed a sale on a rather smart three bedroom detached property in-between Christmas and New Year!
But what does 2017 hold in store? We suspect predictably unpredictable, which could apply to any year. However, we’ve dived into the data and offered a view on what the rest of the year may offer.
We’ve taken a look at three key areas, which are likely to be the most relevant, namely:
- Property completions.
- Properties available.
- Property prices.
Using data from Land Registry and RightMove, we’ve done some high-level analyses, applied our extensive property experience and hopefully provided an objective view for the next 12 months.
When it comes to sales and reviewing the data from Land Registry, nationally, there was a 7.3% decrease in the number of completions for November 2016 versus November 2015. For the Vale of the White Horse district, based on the same timeframe and data source, we’ve seen an alarming 65.8% drop in the number of completions. Certainly, a point of concern and it’ll be interesting to see the December figures when they’re published.
Prediction 1: There’s likely to be less properties sold in 2017 that looks pretty certain. The variance in local and national figures could indicate an average decrease in volumes for the local area in the regional of 35%.
Let’s now add in figures for the properties available for sale, and again focusing on the Vale of the White Horse, in December 2016, there was a 9.1% increase in total property stock compared to December 2015. We suspect the main reason for this is the amount of legacy property that remains unsold. This is further collaborated by an average length of time on the market increase of 10 days. A more telling figure is the 20.8% drop in new instructions for December 2016 compared to the same time last year.
Prediction 2: For the first quarter of 2017, properties available will appear to be stable due to the increased time each property is spending on the market. However, if the new stock coming to market continues to decrease, there will ultimately be less properties to choose from.
Of all the property related discussions, price remains the most sensitive and emotive. We all like to think of our own property as being unique, special and somehow immune to changes in the market. So going back into the data, we seem to have some better news. Using the completed price paid information, we see an average price increase of 8.9% for Vale of the White Horse when comparing November 2016 to November 2015. It’s always best to reserve judgment until the December 2016 data is in, but you’d have to say, so far so good for 2016.
There is however something we’d like you to consider. The Nation Association of Estate Agents (NAEA) reported that in November 2016, 84% of properties sold below their asking price. That’s eight out of ten properties on the market having to take an offer. With completions typically taking 12-16 weeks, it’ll be February, March and maybe even April before we can assess the impact by analysing the completion price paid data.
The NAEA are also reporting that prices will “stall” with minimal increases at best. The Royal Institute of Chartered Surveyors (RICS) believe a national increase of 3% is possible with transactions levels being down on 2016 by 20%. The Halifax predicts prices rises between 1 and 4%, Nationwide are predicting a 2% increase and The Telegraph published a more damning article predicting “massive global property price fall” citing “dangerous conditions” and “market slow down.” So a mixed bag from those supposedly in the know.
Prediction 3: Any increase in prices is going to be minimal and we’ll be able to retain the gains made in 2016.
Moving property is a very personal experience. We’re often asked, when is the ideal time to sell? The answer has to be, when it’s right for you. When the market is rising in value, there’s more chance of selling but more increased competition for your next purchase. In a falling market, there’s less buyers for your own home but if you’re moving up market, the gap is narrowing on your next purchase.
There may be a decrease in the number of social movers, who delay their next upmarket move, however, no market can avoid life’s situations. Employment changes, death, and divorce or inheritance and lottery win are all in the mix when it comes to moving. Couple this with interest rates, help to buy schemes, currency values and a whole host of other factors and, they’ll always be a reason to move.