Prices have risen by 10.6% so far this year, with the biggest increase in June being 2.9%, according to Rightmove House Price Index.
The previous record monthly increase was set back in April 2002 when interest rates were 4% and falling, and the average price was £136,969. Now, in spite of markedly worse affordability ratios due to increases in both interest rates (up to 4.5%) and average prices (up by 58% to £217,173) the market is seeing rises of over £1,500 per week.
James Scollard from CLIFFTONS Estate Agents comments “The property market locally is very strong at the moment, especially in the upper end of the market. Southbourne, Westbourne and along the coastal areas, we have seen many of the larger detached houses being replaced with apartments and we’re expecting significant price increases over the next few years for substantial freehold houses as they become in short supply.”
James continues “Generally, the market cools over the summer months, however, this year we have not seen a fall in the number of buyers and consequently there is a lack of supply fueling the price increases.”
Buyer confidence has been enhanced by staple interest rates and a strong economy. This confidence combined with the ready availability of flexible funding from lenders, means that many of those who aspire to buy houses can still find the means to do so. These increases are demoralizing news for those constrained by affordability, especially those who do not have access to additional funds from sources such as bonuses, parental assistance or inheritance.
Miles Shipside, Director of Rightmove comments, “In addition to growing demand from affluent buyers there are increasing numbers of households being formed. The lack of supply of suitable property on the market, exacerbated by the shortage of new build, means that buyers are faced with paying record prices. These are now set to defy all expectations for 2006. However, buyers are also being canny by insulating themselves from possible interest rate rises, with over 70% taking out fixed rate loans”.
CLIFFTONS can offer free independent mortgage advice and access to one of the UK’s largest mortgage clubs that place circ. 36 Billion pounds per year. With this enormous buying power they have exclusive rates on offer. Call 01202 789699 or call into the office 227a – 229 Old Christchurch Road.