February is a dreary month, isn’t it? New year motivations tend to slip (if they haven’t already) and blue skies and sunshine still feel a long way off. But there are rays of sunshine in the housing market, if this week's cherry-picked selection of property news stories is any guide.
House prices up year-on-year after leaping up in February
Nationwide is one of the most respected of the house price indices, since it's based on the lending under way at one of the country's biggest mortgage providers — and they've reported a 0.7% rise in the average house price in February. This pushes the annual percentage chance to 1.2%, the first time in a year that an annual price rise has been recorded.
As you might expect, the easing of interest rate fears in late 2023, and the accompanying softening in the cost of borrowing, has seemingly unleashed a flurry of activity. 'The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market,' says Nationwide's Chief Economist, Robert Gardner, who adds that the jump means that the average house prices is now 'around 3% below the all-time highs' that we witnessed in the summer of 2022.
He urges some caution, though: borrowing costs are actually nudging upwards once again, and 'if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.'
Of course, no index is perfect — and Nationwide's, being based on lending, ignores the surprisingly large chunk of the market made up by cash buyers. But they're not the only people reporting better times ahead, as you'll see below.
Buyer, seller and agreed sales numbers all on the up
But Zoopla’s latest house price index suggests things are looking up - in the housing market, at least.
Demand from buyers? 11% higher than a year ago. Homes for sale? 21% higher than a year ago. Sales agreed (and this is an important measure of housing market ‘health’)? 15% higher than a year ago.
With momentum building over the last five months, Zoopla reckons 1.1m homes will sell this year, 10% more than 2023.
While housing market activity appears to rally and the rate of house price falls continues to slow, a small proportion of sellers are still cutting asking prices to attract buyers, Zoopla points out.
The property portal’s research also reveals that a three-speed housing market has emerged.
Southern England (outside London) has had the largest annual house price falls. This may play on the minds of some buyers who reportedly paid eye-watering figures to escape to this scenic stretch of countryside in the wake of the pandemic. The prices achieved in Cornwall post-Covid were 'just astronomical', according to a report in the Telegraph.
Meanwhile London has seen ‘much lower’ levels of house price growth over the last few years, leading to affordability ‘slowly improving’. Though that may seem odd when average house prices in the capital are £534,600, twice the UK average price of £263,600.
As for the rest of the UK, where house prices are at or below the UK average, annual price falls have been ‘very limited’, Zoopla says.
Buyers ‘turning to backhanders’ to secure dream home
What lengths would you go to to buy the country manor of your dreams? Well 24% of buyers admit to providing an ‘incentive or bribe’ to put themselves ahead of the competition, according to Yopa's survey of over 1,000 people who've bought houses in the last 12 months. So what exactly were they?
The majority (28%) of those buyers boasted their chain-free status, while 24% made it abundantly clear that they were a cash buyer - even showing proof of their funds in an attempt to seal the deal.
A fifth of them took a more homely approach, bringing baked goodies for the seller. And 10% offered a professional service for free.
A surprising 10% of buyers also offered a cash backhander (described by Yopa as a ‘sweetener passed under the table rather than through the agent’).
While such endeavours may be morally questionable, the results seem to speak for themselves, says Yopa. A whopping 89% of buyers who attempted to ‘sweeten the deal’ said their efforts were successful.
What would $1m get you around the world…?
If it’s value for money (or rather, value for your millions) that you're after, then take a look at Mumbai in India. For US$1m, you could get 103 sq m of prime real estate in the Indian city. That compares to a mere 16 sq m in Monaco, according to Knight Frank’s analysis of selected markets.
The estate agent’s Wealth Report 2024 also shows that house prices in the world’s high-end housing markets rose an average 3.1% last year.
Manila in the Philippines took the top spot, with luxury house prices in the capital city soaring 26.3% in 2023. Dubai, last year’s frontrunner, slipped to second place, with upmarket homes in the emirate increasing 15.9% in value. They were followed by the Bahamas (15%), and the Algarve and Cape Town (both 12.3%).
La dolce vita!
The number of buyers searching for homes in Tuscany and the city of Lucca in January have soared 39% and 60% respectively compared to the same time last year, says Rightmove.
Why? People have evidently been inspired by ‘Amanda & Alan’s Italian Job Season 2’. The TV show, which aired in January, charts Amanda Holden and Alan Carr’s progress renovating a property in the picturesque corner of Italy. If you’re impressed with the pair’s skills, you could now buy the renovated townhouse for £187,777.
The nation’s most valuable road names
Fresh research shedding light on the road names that hold the greatest value could come in handy for your next pub quiz.
‘Hill’, ‘Lane’ and ‘Garden’ top the charts as the most valuable road names, according to Open Property Group. Homes on roads with ‘Hill’ in the name sold for an average £380,000 last year.
But homes on roads named ‘Terrace’ came bottom of the pile, selling for £176,000 in 2023. ‘Terrace’ was followed closely by ‘Street’ and ‘Court’.
Credit: Getty Images
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