Bumper month in city's housing market
Sam WilliamsWith surging sales, rising prices and homes snapped up within 24 hours, February has been a buoyant month for the city's estate agents. But could a lack of supply be artificially inflating the market? SAM WILLIAMS reports.Sam Williams
With surging sales, rising prices and homes snapped up within 24 hours, February has been a buoyant month for the city's estate agents. But could a lack of supply be artificially inflating the market? SAM WILLIAMS reports.
February has proved a bumper month for many city estate agents, with substantial increases in sales and a surge in demand.
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But despite the positive signs, experts have warned the improvement in the market could be a result of a shortage of supply of new homes coming onto the market.
In spite of the continuing cold weather - which agents say usually puts a dampener on activity - the month has proved a positive one for sales, with many homes selling within 24 hours of being put on the market and prices up on a year ago.
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William Lightfoot, branch manager at Haart estate agents in Norwich, said February's sales figures have been the highest since March 2008 - but added quick sales had been spurred by a limited number of properties being put on sale.
He said: 'We have definitely seen an increase in sale levels. In February so far we have sold on average two houses a day, many of which have sold in 24 hours.
'We believe this is largely due to lack of properties on the market which means that we currently have demand out weighing supply.
'With the current market advertising realistic asking prices, motivated purchasers are looking to get on or move up the property ladder before prices increase further.
'Looking at prices, compared to this time last year we have seen prices increase on average by 8-10pc.'
But Mr Lightfoot said he expected more homes to come onto the market in spring, traditionally a time when people look to move home, when the weather is better and gardens look more attractive.
He added: 'This may cause an influx in properties which means it will be a good time to purchase as buyers will have plenty of choice, but this will affect property values as there will be more competition.'
He said he expected a 'steady increase' in property prices over the next year - but a requirement for a 10pc deposit for first time buyers would limit the price rises, he added.
Property agent William H Brown has also seen an increase in demand for homes in February, with viewings up 15 to 20pc. But rather than demand outstripping supply, Giles Hart, senior area director, said the company had also seen renewed interest from sellers considering putting their properties on the market.
But he warned sellers to think carefully before setting the prices of their properties, with buyers still demanding a good deal - and warned the rise could be down to seasonal fluctuations rather than real improvement in the market.
Mr Hart said: 'The level of sales is good, but there has been good interest in the Norwich area for many months.
'Sales again will be greater than this period last year, and considering factors like the weather this is good sign.
'But it is important that as agents we also realise this growth in interest at this time of year is typical and doesn't provide a barometer of a rising market - more a traditional market where we have an even mix of supply from sellers and demand from buyers.
'It should be noted there are many homes still on websites that have been on the market for some time - demonstrating that buyers will walk away from incorrectly priced properties.'
Guy Gowing, managing partner at Arnolds Chartered Surveyors, also reported increased trading, with sales in February up 30pc over the previous month and 20pc higher than February 2009.
But he said the improvement was from a very low base.
He said: 'February is up on last year, but last year was dire. It's healthy but it's not record trading.'
And while sales typically pick up in spring, Mr Gowing said the election could also affect the market this year.
'January is often a quiet month, and things usually pick up in spring,' he added. 'I expect spring to pan out reasonably well. There is a certain amount of confidence in the market.
'The only thing that could alter that is election fever. The uncertainty over the election could cause people to defer investments.'
And Mr Gowing said the firm had also seen 'very low levels of supply', which he said had 'helped to keep prices up' and meant prime properties were selling 'very quickly.'
Similar trends have also been evident at the top end of the market.
Leonora Swiney, head of residential at Bidwells in Norwich, which specialises in properties priced from �350,000 to millions, said inquiries from potential buyers had doubled since January - but she said a shortage in supply was affecting the market.
She said: 'We have definitely seen an increase in inquiries. Buyers are desperate to get settled and have got money. But we are so disappointed by the lack of new stock coming onto the market.
'Anything new to the market is being snapped up very quickly, and very good prices have been achieved, but there is still a lack of commitment from the sellers. They just seem to want to sit on their hands for a bit.'
However, Louis de Soissons, head of residential and a director at Savills, said the company had seen an increase in both buyers and sellers in the higher end of the market, with activity improving earlier than usual in the year, and sales up a third over the same period last year.
He said: 'Properties are coming onto the market earlier in spite of the weather, which is usually a strong indicator in the property market.
'What we have seen is an increase in the number of houses coming to market much earlier in the year.
'The properties that would normally come in April or May have come in February or are planned for March.
'It is not just big country houses, but the period market has certainly been more active than we would normally expect, notwithstanding the fact we are still in the depths of winter.'
How house prices have changed
Over the past 10 years, average house prices in Norfolk increased each year to a peak in November 2007, after which they fell away substantially in the recession.
But since June 2009, prices have increased each month.
In December 1999, average house prices in the county stood at �62,661.
By November 2007 that figure had risen to �166,951.
During 2009, prices fell to a low of �136,993 in May, but increased every month after that to �145,343 in December, the last month figures are available for.
Average house prices in Norfolk
November 2007 (peak)�166,951
Rise in activity at Homes24 website
The start of the year has seen renewed confidence in the housing market, according to Evening News property correspondent Caroline Culot.
Ms Culot said agents had reported increased sales and offers for homes featured in Evening News publisher Archant's property supplements, both in print and online.
The company's www.homes24.co.uk website also saw strong results, with more than half a million unique visitors to the site in January, a month which also saw a new high for property levels.
Ms Culot said: 'After the uncertainty and lack of confidence seen in the housing market for much of 2009, this year does seem to have got off to a strong start, with agents reporting a higher level of transactions and more movement from first time buyers.
'I personally sense renewed optimism from the amount of houses going under offer after being featured in Archant property supplements, both in print and online.
'People have realised that prices are more likely to go up now rather than go down much further and are also cautious about what the general election may bring, so they are acting now, rather than waiting, which was a big problem last year.
'My only worry is whether the market may slow down in the spring and summer with the election and also the World Cup. Will our rejoicing now be followed by a bit of an anti-climax?"
t See tomorrow's Evening News property supplement or visit www.homes24.co.uk
Mortgage lending slumps despite strong city trading
Despite positive signs in the Norwich housing market early this year, mortgage lending slumped to an eight-and-a-half-year low during January in a lull following the end of the stamp duty holiday.
Figures revealed yesterday showed the major banks advanced just �8.02bn during the month, 26pc down on December's figure and the lowest level since May 2001, according to the British Bankers' Association (BBA).
The group blamed the fall on a combination of people rushing through purchases during December to beat the end of the stamp duty holiday, and the wintry weather during January hitting market activity.
From the start of the year, the stamp duty threshold returned from a temporary spell at �175,000 to �125,000, meaning buyers of properties valued at more than �125,000 will pay 1pc stamp duty.
Lending had been unusually strong during December, with advances totalling �10.92bn, the highest figure for more than a year, during what is traditionally a quiet month for the housing market.
David Dooks, BBA statistics director, said: "It was no surprise to see the January mortgage figures falling back from December, when transactions were being pushed through to beat the end of the stamp duty relief.
"There was a natural reaction in the January figures and the bad weather further suppressed market activity."