Why we are in danger of thinking the property market is better than it is - but there are big winners, says property expert Jonathan Rolande
There are some winners in the current property market
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Just last week, Rightmove reported strong buyer demand and sales - with the average price of newly marketed properties rising by 1.5 per cent in April.
Nationwide’s respected price index showed growth edging up in March with UK house prices up 1.6 per cent compared with a year ago.
And experts at Halifax also reported house prices being up on last year, growing by 0.3 per cent annually.
I’m sorry to act as a rain-cloud but to describe the current situation as “positive” is a little optimistic. It also misses a key point.
Cash buyers are benefiting the most
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The figures the market is celebrating come from a very low ebb. A year ago the market was still recovering from the botched Budget of Kwasi Kwarteng which shook the property sector to its foundations.
We’ve moved on from there but we could be in danger of thinking things are better than they are.
Nearly halfway into 2024, it is beginning to look like the year will mostly be one of consolidation and stabilisation.
The inflation rate is falling and wages are rising. This is good news. But very few people feel better off than they did two or three years ago, and we look unlikely to reverse that feeling any time soon.
Until that feel-good factor returns, the market is being buoyed up by cash purchasers who currently account for over 30 per cent of sales. It was more like 20 per cent until 2022. So cash-buyers are king right now.
The market is becoming more weighted in favour of those fortunate enough not to need a mortgage, be it investors, overseas buyers or downsizers.
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Jonathan Rolande shares his expertise
JONATHAN ROLANDE
Many are also in a stronger position than they might otherwise be, thanks to unusual gains in the stock market, commodities, and even cryptocurrencies, perhaps the result of years of money printing by the world’s major economies.
Much of this wealth needs to find a home and for many, that’s increasingly becoming bricks and mortar.
This is depressing for a standard buyer who tends to be someone looking to get out of the rental trap, someone looking to start a home with a new partner or looking to accommodate a growing family.
Once inflation is factored in, the home-owning dream for many will become ever further out of reach.
Jonathan Rolande is a property expert from the National Association of Property Buyers and Home Sale Hub