Property asking prices are up! That is the positive news this week after the big bounce-back in the housing market is echoed by Rightmove data today.
They suggest that average asking prices are up, yes up, on average 1.9% compared to March.
There are record numbers of owners asking for valuations, listings are up, and the number of sales agreed are only 3% down on a year ago. 40,000 new sales have been agreed since the market re-opened on 13th May. We are also not seeing any evidence of price cuts either with Rightmove saying that there is upwards pressure if anything. Buyers are agreeing to pay 97.7% of the asking price on average, an improvement from 96.6% for sales completed in February.
This is all positive news as pent up demand gets released onto the market and Estate Agents are reporting loads of activity.
Andy Shepherd, CEO of Dexters in London, commented: “We’re tremendously busy across all of our 70 London offices. Transactions numbers are increasing daily, over the past two weeks we’ve agreed sales on over 250 properties and arranged lettings on over 600, so 85 a day or 10 an hour in the working week. Immediately before lockdown we’d seen the best market for five years. However comparing last week with the first week of March we are 60% up on transactions. A recurring theme from both buyers and tenants is the need for more interior space for home working; outside space, whether a balcony, roof terrace or garden and a more convenient location, whether for work, leisure or family reasons.”
There are a couple of other things to mention this week after another session Sunday night on LBC Radio answering people’s questions.
The biggest area of difficulty at present is in 90% LTV lending, with a few lenders back in this market but being forced to either limit applications on a tranche basis or pulling out again quickly due to the sheer volume of applications.
The reasons behind this are pretty clear and it is not down to valuation issues but is still all down to the question of capacity.
HSBC has been exceptional in the way they have continued to support the market throughout all of this, and although Accord, Virgin Money, Clydesdale, and Ipswich Building Society came back for a while, they have been forced to retreat again. Coventry has an offering through brokers for a limited period and Bank of Ireland has also returned to this market.
Until lenders can adequately deal with this amount of applications again it is going to be a case of making sure you speak to a broker who knows which lender is open at these higher ranges and has access to the booking systems.
There were also a few questions around poor credit scores. It has been the case for a while with some mainstream lenders that they have some strict criteria around defaults or missed payments, and we are seeing some lenders becoming a little stricter around this.
Whilst lenders are still struggling with capacity issues with staff working from home it is a case of the business that they can take in they want to be as good quality as possible. This means that where cases that are slightly outside of criteria may have been able to be looked at a few weeks ago, there is less appetite to do so now.
The better news is that we are seeing the return of specialist lenders back into the market, who will be able to cater for borrowers in this instance. Specialist lenders are of the utmost importance in these markets, being able to bridge the gap between mainstream lenders in helping those borrowers where their circumstances do not quite fit in the nice clean boxes.
I would advise anyone who has such a situation to speak to a professional broker who will know which lenders are more accepting of this scenario than others. Even mainstream lenders can often take a view if presented correctly especially where brokers have a good relationship with the lender.
In terms of mortgage rates, for standard residential mortgages, borrowers can obtain 2-year fixes at 1.14%, (3.20% APRC) and 5-year fixes from 1.39%, (2.80% APRC) whilst variable tracker rates are around from 1.24%, (3.80% APRC).
Those looking at Buy-To-Let can now obtain products from 1.19%, (4.55% APRC) for 2-year fixed or 5-year fixes are available from 1.62% (3.77% APRC).
For further information or to speak to one of our friendly advisers, contact us here or call 020 7220 5110.