Fenn Wright – an East Anglia estate agent with eight branches across Essex and Suffolk – has reported that it has seen strong house sales throughout summer but is now expecting the region to shift to more of a buyers’ market in the final months of 2017. Fenn Wright’s managing partner, Alan Williams, was quoted in an article on PropertyReporter.co.uk as saying that East Anglia is now seeing a “much more price-sensitive market” with some properties “taking longer to sell”.
The Bank of England interest rate rise from 0.25% to 0.5% in early November might be expected to play its part in property market fortunes, but in fact many analysts believe that the rate increase is unlikely to have a significant bearing on UK house prices. The most recent (October 2017) Halifax House Price Index report says that “we do not anticipate the Base Rate rise will be a barrier to buying a house”, although “increased pressure on household finances and continuing affordability concerns” could negatively affect buyer demand.
Nationally, Rightmove’s House Price report shows definite signs of a shift towards a buyers’ market, with new-to-market sellers trimming asking prices by an average of 0.8% (down £2,392) and asking prices reduced since first listing on 37% of properties already on the market. This latter figure represents the highest proportion of asking price reductions on the UK housing market for five years. In the words of the report, sellers are “obviously keen to sell; there’s an opportunity for buyers to negotiate a good deal in the quieter run-up to Christmas”. But how does this translate to East Anglia, and what does it mean in the medium to long term?
In the past month, the East of England has seen the average house price drop by 1.3%, from £350,671 to £346,106. All areas of England and Wales saw a drop in prices over the past month, with the sole exception of Yorkshire and the Humber, where there was a modest 0.6% increase. The East of England’s monthly price fall was relatively small compared to the North East, which saw a more marked drop of 5%.
Compared to this time last year, the average house price in the East of England has increased by 3.6%. This performance falls somewhere between regions like the East Midlands, West Midlands and Wales – which saw stronger price increases of 5.5%, 5.1% and 4.5%, respectively – and a couple of areas which have seen a net price drop over the past year – 0.4% in the North East and 2.4% in Greater London. Overall, the East Anglia housing market continues to display a level of stability and balance between supply and demand that isn’t the case in some other regions.
The indications that the region is – at least in the short and medium term, and possibly in the longer term – transitioning into a buyers’ market isn’t restricted to the owner-occupier residential property market. Fenn Wright reports a continuing strong demand for commercial property in Essex and Suffolk. And while recent taxation and stamp duty changes have had an impact on buy-to-let property landlords, they also suggest that the hardening of the residential market will allow investors the opportunity to “purchase properties at a reduced rate in a more static market”.