“It’s a very good time to sell your home”.

Despite consecutive interest rate hikes, the average homeseller in England and Wales is achieving 99.4% of asking price so far this year, the latest data released by estate agent comparison site GetAgent.co.uk has revealed.

Sellers are getting 2.4% more for their property when compared to this time last year, according to GetAgent.

“We’re yet to see a flurry of interest rate hikes dampen buyer appetites in 2022, and, despite the wider economic backdrop, property market performance remains red hot across the vast majority of postcodes in England and Wales,” Colby Short, co-founder and chief executive of GetAgent.co.uk, said.

GetAgent data found that sellers are achieving 100% or more of their asking price expectations in no less than 41% of postcodes in the two countries.

The best performing area of the market is the PL34 postcode in Cornwall, where sellers have achieved a huge 119% of asking price so far in 2022. Not only is this the highest level of asking price achieved of all postcodes in England and Wales, but the area has also seen the largest increase, up 21.2% on this time last year.

Nine of the 10 strongest performing postcodes have also enjoyed the largest annual improvements.

BA10 in South Somerset (113.7%), LL24 in Conwy (112.8%), LL40 in Gwynedd (111.2%), HR5 in Herefordshire (110.5%), TA16 in South Somerset (110.3%), LL42 in Gwynedd (109.1%), SA66 in Pembrokeshire/Carmarthenshire (108.4%) and LL15 in Denbighshire (107.9%) are home to the highest percentage of asking price achieved, having also seen this percentage increase by between 12.4% and 19% when compared to last year.

Birmingham’s B6 postcode also makes the top 10 strongest performing markets with sellers achieving 111.2% of asking, while the LL63 postcode in Anglesey has seen one of the largest annual increases at 19.7%.

“Not only has the average percentage of asking price achieved continued to climb when compared to last year, but over 40% of sellers are exceeding the original price set for their property, while sold prices are slipping below 90% of the original asking price in less than 1% of postcodes,” Short said. 

“It remains to be seen just how long the market will continue performing at such a rate, but as it stands, it’s a very good time to sell your home.”

GetAgent collected data from all of the major property listing portals, which are then cross-referenced with the Land Registry using their proprietary algorithms and input from partner agents, to see where sellers have achieved the best price for their property compared to the price they listed it for sale at.

House price inflation is falling, but be careful what you wish for

Will the housing market ever crash, and then will I be able to buy a house?

If I had a tenner for every time I’d been asked this question, I’d be a second homeowner by now, for it is the most common housing question that is ever put to me.

Given that renting is expensive and unstable while homes have earned more than people in recent years, it’s not hard to understand why 86 per cent of people would prefer to own their home than rent. And, similarly, it doesn’t require much magical thinking why anyone who is currently struggling to save for a deposit or find a home they can afford to purchase but, instead, looking on in horror at data showing that house price inflation keeps hitting record highs and therefore that homeownership is getting harder to achieve, might be determinedly willing house prices to fall.

Well, it has happened. According to Halifax – Britain’s largest mortgage lender – house prices have stopped rising and not only has inflation slowed down, but it has also turned negative. For the first time in more than a year, house price growth fell in July by 0.1 per cent.

This news comes amid what can only be described as economic doom – warnings from the Bank of England that consumer inflation is expected to hit 13 per cent later this year and that Britain is headed for a 15-month-long recession as they hiked interest rates to 1.75 per cent last week – and could signal that reality – aka the cost-of-living crisis – is finally catching up with house prices.

Does the fact that house price growth has stopped mean change is coming? Is the pandemic house price boom over? And, if it is, will it help those who have previously struggled to become homeowners?

Now, firstly, this is just one month’s worth of data and it’s worth noting, as market analyst Neal Hudson does, that house prices are still 11.8 per cent higher than they were this time last year. To put that figure in context, the annual rate of growth was 12.5 per cent in June. And, when all is said and done, the average home still costs more than £30,000 what it did this time last year.

Secondly, it’s certainly true that the economic conditions which have enabled house price inflation since 2008 have changed. Ultra-low interest rates are gone, for instance. Last week’s new 1.75 per cent base rate puts them back at a level not seen since 2008 and economists predict that further rises lie ahead. If that turns out to be true, house prices will likely continue to reflect this new economic reality.

Thirdly, consider this: the number of residential property transactions has fallen by 55 per cent compared with this time last year, the number of mortgage approvals has fallen every month for the past five in a row.

But, all told, this doesn’t necessarily mean it will be any easier for struggling first-time buyers. Indeed, if there is serious economic turbulence ahead, buying a home could become harder. Inflation means that ordinary households are taking a real-terms pay cut. Private rents are also rising as landlords jack up rents across the country, adding to the squeeze on household budgets. This will make it harder to save for a deposit. Added to that, even though the Bank of England has relaxed the affordability stress test for mortgages, mortgage advisers tell me that lenders are tightening their lending criteria (often in opaque ways) which makes it harder for first-time buyers to get over the line.

There’s no surefire way of knowing whether house prices will fall significantly or “crash”, as some people like to put it. Economists have stopped making predictions about this housing market since 2020 as house price inflation has continued to defy expectations, even in a global pandemic. But, as economists like Roger Bootle of Capital Economics and Joshua Ryan Collins of UCL’s Public Policy Institute have explained in my column over the past year, since the pandemic began, house prices have become increasingly unhinged from earnings and that, at some point, something has to give.

But, if do you find yourself wishing for a housing market downturn remember two things: whenever that has happened it is those who borrowed the most and have the least who have ended up in negative equity, paying off loans bigger than the value of their homes, and investors with cash to burn who really profit because they can easily buy up cheap homes and wait for them to appreciate.

A housing market bust might sound like a great leveller but, if recent history is anything to go by, it would be anything but.

This week’s column will ask what is being done to help young adults without family wealth because, right now, a 0.1 per cent drop in house price growth is not going to do much for them at all.

Key Housing

And, while we are on the subject of interest rates, let’s scroll back to last week’s base rate hike and pause to consider what it means for mortgages.

Economists argue that interest rate rises are the best tool for curbing inflation because putting up the cost of borrowing reduces people’s disposable income which, in theory, drives down demand for goods and slows price rises.

However, given that energy prices are surging, due to the war in Ukraine, you might reasonably wonder how making servicing debts more expensive will bring them down?

That being said, not everyone agrees that last week’s hike to 1.75 per cent – a 13-year high – was the right approach.

I spoke to Jonathan Webb, a senior research fellow at the progressive think-tank the Institute for Public Policy Research. He said:

“Last week’s interest rate rise from the Bank of England was a necessary measure to tackle spiralling inflation, albeit a smaller increase would have been in line with gradually stabilising the economy and supporting growth.”

Webb added that the hike, necessarily as it might be, will have an impact on the housing market.

First, there is the obvious impact on mortgage repayments. “For those homeowners with a mortgage, standard variable rates are likely to increase, and any new fixed term deals will be offered on a higher interest basis. This will increase peoples monthly mortgage payments, in some cases considerably,” he explained.

Second, there is the unintended consequences for renters who might end up absorbing their landlords’ living cost woes. “In the private rented sector, landlords who finance their properties with a buy-to-let mortgage are also going to see rising interest rates. There’s a real risk that these increased costs are passed on to tenants in the form of higher rents,” Webb added. “At a time when people are already grappling with spiralling energy costs, this could place significant pressure on already struggling households”.