A sizzling property market

Property

A busy 2021 in the local property market has continued into the start of 2022 with plenty of activity keeping us busy. Philip Boyden reviews the housing market and looks ahead to the next quarter.

I can hardly believe that we are already a quarter of the way through the year, and what a busy year 2022 has been so far for both the sales and lettings markets. The sales market has continued to see consistent growth with increased agreed sale prices in the first quarter. We have also witnessed an increasing number of sales agreed over guide and asking prices.

Bearing this in mind, it is still advisable to be realistic with pricing. If a property is released at too high a price, it will sit on the market and lose that ‘new to market’ buzz. At Boydens, we are finding that releasing a property at a realistic lower guide figure is optimal with a higher bracketed ‘aspirational figure’ more often than not resulting in a higher eventual selling price.

So, what is driving these continued increased sale figures? I believed (as did many others) that we would witness a slight correction in the market or ‘flat-line’ from the end of the stamp duty holiday last year, but in practice this has simply not been the case.

Driven by high levels of demand in our area, the number of ready, willing and able buyers is currently outstripping the housing stock available. I cannot see this changing unless lenders/valuers become cautious on pricing and begin down-valuing agreed sales for mortgage purposes.

Where are these buyers coming from? We are seeing a lot of potential purchasers moving up the A12 corridor, mainly from the Romford and East London areas. We are also experiencing a number of parties coming from over from the other side of the Dartford Crossing where, although prices have risen in the area, buyers can get comparatively more for their money here.

Out-of-area buyers are less familiar with the local market compared with locals who know the ‘hotspots’ and have historically gravitated towards them. Prices in the most desirable locations from three to five years ago have risen, but perhaps not as quickly as the new ‘up and coming’ locations, which are now very much on the radar of buyers.

Many interested parties registered with us are already under offer and in a complete chain, so they are under pressure to find a property. This can then have the impact of creating some urgency to put in a high bid

Property

Property

as most have missed out on other properties, having themselves been out-bid by others.

In addition, commuters are more receptive to properties located further afield from popular railway stations. Not having to commute five days a week and only having to go into the physical office for only part of the working week has broadened the radius of many property searches, and so brought new locations into the picture.

The lettings market is seeing a strikingly similar story with high demand from tenants looking for good quality family homes in this area, but a distinct lack of rentable stock to meet this demand. This includes renters who are looking to up-size from their one or two-bedroom flats as well as clients wishing to move into the area from further down the A12 corridor, and has created upward inflationary pressure on rental values being achieved.

Properties are in demand across the board, from onebedroom flats to five-bedroom family homes, with previously less popular locations also now renting out well due to the current supply and demand issues. So, what is causing this lack of stock on the market? With a large property management portfolio under our control, we have historically seen tenants who may have resided in a flat for, say, two to three years look to move on into a house with some private space. What we are increasingly seeing is that due to the increased rents for all types of properties, tenants are staying put and therefore not freeing up their property to be re-let.

In addition to this, a number of landlords have taken advantage of the leap in property values and, also deterred by increased legislation/taxes introduced in the last few years, they have offloaded their investment properties, thus exacerbating a lack of supply.

In conclusion, the first three months of the year have continued in the same vein as the end of 2021 with little sign of the market slowing down in this area. With demand showing no signs of waning, the only way I can see a change to this is if the lenders toughen their valuation and lending criteria and so, if you are considering a move, the market is fast moving, but we are ready to guide you every step of the way.