Nicky Stevenson, MD of Fine & Country UK, comments: “The number of buyer enquiries per property for sale is traditionally highest in March, April, and May, with 2022 looking like no exception. With the largest mismatch between demand and supply at this time of year ever recorded, Rightmove report over one in five properties is currently going from listed to Sold Subject to Contract (SSTC) in just one week and nearly half within two weeks. An estimated 75% of properties are successfully finding a buyer, up from a historical average of around 50%."
She highlights that the average price of a property coming to market has breached the £350,000 barrier, while Nationwide report that, at 14.3%, annual price growth in the year to March is at its strongest level since November 2004.
She adds: “With strong competition for available properties, many sales are subject to ‘best and final offers’ and nearly 40% of properties are selling at or over asking price. Despite fears that a lack of properties to sell would impact transaction levels, sales, and mortgage approvals to date in 2022 are running higher than the longer-term average seen between 2017 and 2021. Added to that, annual price growth is evident across all the prime markets of England and Wales."
She comments that by the end of 2021, the UK economy was just 0.1% below its pre-Covid end of 2019 level. However, the Chancellor, in his Spring statement, has warned that the global economic outlook is ‘challenging’.
Stevenson notes: “The Office for Budget Responsibility has downgraded its forecast for UK economic growth in 2022 to 3.8%, which is substantially below the 6% forecast in October. Reports show that consumer confidence has also fallen for the fourth consecutive month, as the pressure on household finances increases. Record high food, fuel and energy prices are set to see inflation average 7.4%, peaking at over 8% in the final quarter, while wage growth is predicted to be 5.2%.
"In a bid to calm spiralling prices, the Bank of England raised the base rate of interest for the third time in four months to 0.75%, still low by historic standards but more incremental rises are expected. While many households will benefit from a Council Tax rebate and changes to the National Insurance threshold, the ONS report household savings levels are now at their lowest level since the start of the pandemic."
She adds: “With the energy and fuels costs rising, we will likely see an increasing number of buyers considering energy-efficient properties. According to new research from Aviva, 37% of adults stated that they would consider the energy efficiency rating of their next home, a considerable rise on the 22% that did so on their current home.”
She concludes: “A far higher proportion will consider the state of the double/triple glazing, as well as wall and roof insulation. Over 25% would be keen to purchase a home with a renewable energy source and 22% would like an electric vehicle charge point. Energy efficiency is one of the main reasons why people consider a new-build property, virtually all of which are EPC rated ‘A’ or ‘B’. Although nearly half of current homeowners believe significant eco-changes would be too expensive, the government’s announcement of 0% VAT on materials and installation of energy efficiency equipment for homes may well make some homeowners reconsider."
