FROM the start of 2013 there have been some positive signs of recovery in residential property market in various parts of the country and particularly in the capital city where the central London areas remain in great demand.
Analysts report that last month was the best January for the past two years and according to a survey compiled by property analysts, Hometrack, 79 per cent of estate agents are more upbeat about the market than they were last year.
The head of research at Chesterton Humberts, Nick Brown, said: “After what was a tough year in 2012 with the extreme weather, the Olympic and the Paralympic Games and a stagnating economy, I am optimistic about the prospects for the prime London market in 2013.”
In January, house prices were generally flat after six months of significant falls, with only 16 per cent of postcodes in London experiencing a decline. Low levels of transactions have meant that positive developments have been localised but estate agents are optimistic that things will pick up further in the spring.
Properties in the pipeline at Chesterton Humberts, for example, are already 41 per cent higher than the same time in 2012 and the highest it has been since 2009.
Director and housing market analyst at the online company, Rightmove, Miles Shipside said: “With sellers having a real upper hand in pricing power in the highest-priced and most sought-after locations, some buyers demand will ebb away from the most fashionable hotspots and flow into other boroughs.
"Buyers in the capital have a great track record of looking elsewhere to seek out new areas offering greater value and potential.”
London’s asking price has grown at 1.2 per cent this month hitting a record high of £486,890.
Rightmove said the slowest growth seen since 2009 in the usually strong month. But taking a wider view, prices were still steaming ahead up 8.4 per cent at the same time last year, as an easier lending climate helped unlock the housing market but sellers benefit from scarce supply.
The picture was similar for the rest of Britain with asking prices having climbed 2.8 per cent this month (well down on 2012’s 4.1 per cent and expansion over the same period) but pushing prices up to £235,741, the highest average recorded in the month since 2008.
“There has been a sprightly start to this year and while market activity remains patchy in some locations and in the different property types, some agents are reporting their busiest new year since the onset of the credit crunch, “said Shipside.
With growth in asking price cooling, up just 0.7 per cent on three months ago, Shipside added: “It remains to be seen whether sellers can achieve their record new price aspirations, which will require buyers to find the extra money and justify to themselves the higher prices being asked.”
The divergence between the London and national markets was highlighted by different reasons given for moving house. Where movers in the rest of UK are most likely to be downsizing, movers in the capital are most likely to be inclined to increase their living space.
In view of this, sellers are being quick in hiking asking prices particularly in the exclusive up-market locations such as Kensington and Chelsea where the average price has shot up by 15.5 per cent since a year ago to £2.2 million.
While there are now signs of a recovery in the property market, it is not all good news. A report issued, following a survey by a leading real estate agent, Knight Frank, says it is unclear whether hopes of a significant boost in mortgage lending, following the Bank of England’s multi-billion ‘Funding for Lending’ scheme, will be met. This is because despite the reduced rates, the number of mortgage approvals is currently the same as it was in the wake of the financial crisis. Some economists have argued that it is too early to see any real change and that any effects will be apparent later into the year.