It is not just the last 12 months that have been challenging in the housing market
This year has been a challenging one but it not just the lead up to Brexit that has had an impact, indeed policies and political events have changed the property market in the UK over the last five years.
It is fascinating that a major new piece of research, the Housing Futures report from Strutt & Parker, shows that it is more than just the fact that more people are renting a home.
While renting has increased as a future tenure from 10% to 13% since 2013, big cities have become more popular as a preferred location to live, up from 9% to 15% while those that anticipate living in a single person households rose from 8% to 11%.
Broadband is now seen as essential for the majority of home movers, up from 48% to 57% and providing financial support for relatives has become one of the key reasons to move home, up from 15% to 22%.
Five years of survey results showed that a desire for a more relaxed, accessible lifestyle lies behind the most popular reasons for moving home. Along with privacy, mentioned by 66% of respondents, access to local shops and amenities, digital connectivity and public transport are among the top reasons for moving.
Access to public transport was mentioned by significantly more respondents at 48% compared to 37% in 2013. Even in the digital age, more people wanted to be close to family and friends, up from 37% to 48%.
Walking to work was also seen an increasingly attractive option, up from 25% to 36%. This year’s survey also showed marked changes when it comes to the size and type of home respondents expected to move into in the future.
All of this needed to be taken into account because finding a home to buy has become harder and more complex. The number of house sales falling through in the UK before completion is on the rise, up 5.2% quarter on quarter, new data from independent home buyer Quick Move Now shows.
Its report points out that the start of the year was incredibly difficult, with fall through rates hitting a first quarter 10 year high of 38.8%. According to Danny Luke, Quick Move Now’s managing director, political and economic uncertainty has left many homeowners and would-be buyers feeling nervous, and most estate agents are now openly acknowledging a slowing market after an unseasonably sluggish summer.
Official data upholds the feeling of the market slowing. The Land Registry figures show that property prices in the UK increased on average by 0.2% month on month in August and were up 3.2% year on year to £232,797.
It was interesting to read the new study from Direct Line Select Premier Insurance which shows that bricks and mortar account for only 59% of a property’s market value in the UK with factors such as local amenities, schools and public transport accounting for over two fifths.
Overall, the average sale value of a house is £114,000 more than its rebuild cost and the average person overestimates the rebuild cost by 38% and the analysis of property prices for three bedroom homes across 12 major UK cities reveal that the average house price of £277,608 is 59% higher than the projected rebuild cost of a similar property, which is valued at £164,000.
The research also reveals that the public have little to no idea of the amount it would cost of rebuild their property, with British adults estimating it would cost an average of £226,750 to rebuild a three bedroom house, some 38% more than the actual cost.
It will be interesting to see how all of this pans out over the next five years with Brexit looming and the number of new homes being built still not reaching Government targets.