Looking forward: What’s next for the property market in Hertfordshire?
PUBLISHED: 15:09 07 January 2020 | UPDATED: 15:10 07 January 2020
What does the General Election result mean for the local property market? Richard Burton investigated.
I've hardly had a conversation with a property professional over the past three years that hasn't included the words Brexit and uncertainty, usually in that order.
The Referendum brought circumspection for both buyers and sellers and left estate agents having to adapt to almost unprecedented market conditions, with everyone seizing on any nugget of good news as a sign that the market may settle into something recognisable.
All that, on the face of it at least, changed when the Conservatives swept to victory last month, and while Brexit has yet to happen, its inevitability - unwanted as that may be in certain constituencies - has brought the first signs of stability and with it, some real movement.
"The election has had a massive impact. No one has mentioned Brexit since then," said Craig Flynn, branch manager of Connells in Letchworth. "I really think people have put it behind them now and decided enough is enough, it's time to get on with it as far as property is concerned.
"And it doesn't surprise me, to be honest. The whole thing's dragged on for so long. In fact, as things stand we're on course for our best January in years in this branch, having sold seven in the first week. Last year we sold the same number in the whole month."
He sees no sign of that tapering off, given the number of new homes coming on to the market and the fact that Letchworth has always been a strong first-time buy market with prices averaging around £300,000 heavily weighted towards flats and terraced homes.
Rupert Sweeting, head of country sales at Knight Frank, had a similar message. "Looking forward, the fog will lift with the government's clear majority allowing some certainty and a return of confidence to the market in 2020.
"Buyers who have been 'sitting on the fence' can move forward and sellers will be assured that there will be an increase in the number of parties wanting to buy. Consequently, there will be an increased volume of stock allowing for more choice."
His colleague, Oliver Knight, associate in their Residential Research arm, agreed that the election should release some "pent-up demand" but cautioned: "The extent to which this translates into transactions in the short-term will depend on the size of the pricing expectation gap between buyers and sellers."
He's not alone in that view. Most agree that, while overall supply is likely to rise as sellers feel more confident about going on the market, any growth in supply will potentially apply what estate agents call "downward pressure", keeping high prices at bay.
Nick Ingle of Savills, said: "We are expecting only modest price growth in 2020 on the basis that, despite domestic political uncertainty receding, some economic uncertainty will remain until a trade deal is agreed with the EU; even if, as is widely expected, the UK leaves the EU by the end of January without a further extension of Article 50.
"This could mean a bounce in demand in the first part of 2020 proves difficult to sustain through the summer months and into the autumn market."
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His comments came as Savills revealed some interesting statistics that broke house price inflation down to a daily rate. Homes in St Albans, for example, have increased by £56.73 a day in the past 10 years, an increase of £200,624.
Using figures from the Office for National Statistics, they also calculated that Stevenage homes rose by £31.24 per day, adding £110,272 overall and £41.92 a day in Welwyn and Hatfield where owners saw their investments grow by £147,980.
It's a trend that's set to continue, with Savills forecasting house prices in the East of England will increase by 10.9 per cent by 2024
"Most recently, post-EU referendum sentiment has dominated and there has been a slowdown in the market - but even this year in the face of considerable political and economic uncertainty the market has remained largely resilient," said Ingle.
"Prices have held their own and we have seen strong interest from committed buyers. We are fortunate to live in a very sought-after area that offers a way of life that is second to none."
Elsewhere, The Royal Institution of Chartered Surveyors was optimistic about the potential of a Boris bounce, forecasting rises of two per cent nationally in the next year, an opinion mirrored by Rightmove.
Director Miles Shipside said: "The greater certainty afforded by a majority government gives an opportunity for a more active spring moving season, with some release of several years of pent-up demand."
And the Halifax weighed in with a forecast of one to three per cent, "consistent with the pattern of weaker growth seen since 2017".
Managing director Russell Galley said: "The shortage of homes for sale and low levels of house-building will continue to support high prices, while the challenges faced by prospective buyers in raising the necessary deposits may continue to constrain demand."
This all assumes a smooth transition out of Europe. Accountancy firm KPMG predicted that house prices would fall by around six per cent if we left without a deal and the Office for Budget Responsibility said such a scenario could wipe as much as 10 per cent off.
There is a bigger political issue for the new government. Home ownership, something central to Tory philosophy, has been in freefall since the 1990s, dropping from 65 per cent to 27 per cent for the under 35s, partly due to the fact that prices are now almost eight times the average earnings, scuppering the chances of many young people getting on the property ladder.
New housing secretary Robert Jenrick took office pledging to strain "every sinew to increase the number of homes that are being delivered" and in his conference speech in October Boris Johnson admitted it was "disgraceful" that we now have lower rates of owner occupation - for under-40s - than the French or the Germans.
But all that aside, the one thing most homeowners want to know post-election is, quite simply, when is a good time to sell?
Craig Flynn admitted there may be some circumspection among homeowners in staunch Remain areas such as St Albans and Harpenden as they wait to see what happens, but it's not something he's seeing in North Herts.
"I know spring is the traditional time to go on the market when the sun is high and the grass is green," he said. "But given where the market is now, I'd say why wait? Viewings are up, valuations are up, mortgage appointments are up. It's a moving market."