Summary:
Confidence for property under £2 million is at a high.
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South West London house owners are among the most bullish in the country, with 89% predicting price rises by the end of the summer according to property website Zoopla’s latest confidence survey.
Dominic Pasqua, Head of Knight Frank’s Wimbledon office, said that although the increase in stamp duty has had a negative effect on properties above £2m, other property has not been affected.
“I have never known housing market confidence for property under £2 million being so high,” said Dominic Pasqua.
The high end agency said that the increase in stamp duty to 7% in April 2012 ‘almost killed’ the market.
But with the clarification of tax rates for overseas buyers issued in December 2012, the market for properties above £2m has improved but demand remains ‘thin’.
However, for properties beneath the £2m mark, Knight Frank sees demand as brisk caused by pent up demand and a lack of suitable supply.
Prices have increased for all properties in Wimbledon 6.96% over the past year, according to Zoopla.
74% of all UK homeowners expect house prices to rise by September and average house prices are predicted to grow by 4.5% over the next 6 months.
Only 13% of all UK homeowners now expect prices to fall over the next 6 months based on 4116 respondents to the survey.
Lawrence Hall, a spokesman for Zoopla, said: “The housing market has seen a number of positive events in recent weeks, and growing confidence from homeowners is a significant step towards recovery.
“With first time buyers lending gradually increasing and the mortgages becoming more readily available, there is a real belief that the property market is starting to turn a corner and finally drag itself out of the hole since the financial crisis.”
Whilst confidence in the market remains a key ingredient of price action, UK house prices for a typical home remained unchanged between February and March 2013, but were 0.8% higher than March 2012, according to the Nationwide House Price Index.
Property commentators stress that national surveys do not provide an accurate guide to the state of the market in any locale, and this still remains the case.
A buoyant, healthy property market is central to economic recovery and the Coalition is hoping through its two initiatives of Funding for Lending and Help to Buy, mortgages will become more accessible to buyers, providing vital to the liquiduity to the property market
But the RICS remains cautious on its general outlook.
Simon Rubinsohn, RICS Chief Economist, said: “While the rental market remains buoyant at present, it will be interesting to see whether Help to Buy begins to encourage some tenants back to the owner occupier market as more higher loan to value mortgages become available.
“Even if that proves to be the case, however, it is improbable that we will see much evidence of this before 2014.”
Photo courtesy of Diana Parkhouse, with thanks.
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