North-East housing market maybe improving … but there’s no ‘bubble’
3:37pm Friday 10th January 2014
To celebrate the start of 2014, Martin Williamson, head of residential property at Latimer Hinks Solicitors, reveals some positivity in the region’s property market
ACCORDING to our survey of estate agents in the area, the situation is improving steadily.
This newly-released data paints a positive picture of the North-East housing market, which is, according to the almost unanimous verdict of the agents we questioned, now showing some real signs of recovery.
Almost all of the agents have seen an increase in the number of sales instructions over the past 12 months. However, our findings indicate that this positivity has not translated into an increase in house prices. Despite reports of a looming ‘housing bubble’, there is something more akin to a ‘cautious optimism’ in our region.
There is little chance of the market overheating any time soon.
The housing bubble, our estate agents believe, is principally a London problem that’s being over-reported in the media.
One agent, Simon Bainbridge of Smiths Gore in Darlington, commented on the possible reasons why transaction levels have increased, but prices have so far remained fairly static: “I think a lot of people are sitting on their hands wondering where the market is going. The market needs to be moving before prices increase.
House prices may increase a little, but there is still not enough competition. We see rises in the South-East, but it can take between six months and a year to take effect in the North-East.”
Agent Geoff Graham of JW Wood said: “We have seen more confidence from both buyers and sellers and an increase in instructions, but there are fewer houses on the market, so the supply and demand ratio comes into effect.”
Giles Edwards of Giles Edwards Yorkshire Property suspects that it may take a while longer for homeowners to regain sufficient levels of confidence to put their properties on the market: “House buying comes in a cycle of five, six and seven years, so when it comes to people wanting to sell at the end of the cycle, they will have bought their property when prices were at their highest, so they will stand to lose money and are reluctant to sell.”
There has been some contention about the level of current house prices and whether a fall was necessary before any lasting market stability could be achieved. “I think there is more confidence out there and people are recognising that houses are selling at a more realistic level than five years ago. But, for properties to sell, they must be priced realistically,” says Andrew Dickins of Robin Jessop.
Stephen McOwan at Smiths Gore’s Corbridge office, summed up the general feeling that there is no housing bubble on the horizon: “Demand and supply are out of balance. Despite reports of a housing bubble in the media, this is only London-centric and hasn’t filtered to the North-East yet.”
So, while the prognosis for the health of the region’s housing market is that it’s ‘on the mend’, there is certainly no room for complacency and most definitely no sign of a housing bubble.