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Archives June 2017

How will the election impact the property market?

House prices: how will the election impact the property market?

House price growth is slowing – how much is this to do with the election and what are the other factors in play?

Despite the ‘housing crisis’ being a key issue on the political agenda, the snap election is expected to have little impact on the property market, according to a new report.

While house prices have dropped for the third consecutive month for the first time since 2009 – and now average £207,699 across the UK* – this is most likely to be due to broader economic effects, says Nationwide’s chief economist Robert Gardner, who compiled the research.

Following years of double-digit house price rises, slowing house price growth is to be expected as, with property experts reporting that buyers cannot be stretched much further.

“If history is any guide, the slowdown is unlikely to be linked to election-related uncertainty. Housing market trends have not traditionally been impacted around the time of general elections,” says Gardner.

“Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home.”
Today, buyers and sellers are contending with income pressures as inflation outpaces salary growth.

Last year it was the additional Stamp Duty charges rather than the Brexit vote that caused market activity to slow – and this impact is still being felt.

“As mortgage borrowing is governed by lenders affordability models, those buyers who are coming to the market are armed with what they know to be their upper limit in terms of what size mortgage they’ve been approved for, which means there is little or no room for negotiation on the price of a property,” says Brian Murphy, head of lending at Mortgage Advice Bureau.

“They can’t ‘go back and borrow a little bit more’ in order to meet a vendor’s full asking price, which are reported to have been quite ambitious as of late in many areas of the UK due to lack of available properties for sale.”

The annual rate of growth has slowed to 2.1 per cent – its weakest level in almost four years.

However, with fewer new homes being built and a shortage of properties on the market, Nationwide predicts prices will rise by around two per cent over the course of this year.

*Data is drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage.

The Waitrose effect

‘Waitrose effect’ can ‘boost house prices by thousands of pounds’

‘Having a premium brand on your doorstep means buyers typically need to pay top prices’

The “Waitrose effect” can help add over £36,000 to a property price typically – while living near any national supermarket may boost a home’s value by around £22,000 – research suggests.

Lloyds Bank found that homes within easy reach of a local supermarket command a premium of £21,512 on average compared with property prices in nearby areas.

Homes near a Waitrose were found to command the biggest cash premium – costing £36,480 more typically than average house prices in the wider town.

Properties close to a Marks & Spencer have the second highest premium, with homes worth an average of £29,992 more than homes further away, the research found.

Lloyds Bank compared average house prices in postal districts with a supermarket from a national chain with typical property values in the wider towns to calculate the price premium paid for homes located near supermarkets.
The research covered homes across England and Wales.

The research suggests that while living near a “premium” supermarket brand can help boost a property’s value significantly, discount chains can also command a premium, with homes located near a Lidl valued at £6,416 more on average than those in the surrounding area.

Home buyers who want the convenience of living near a supermarket but do not want to pay a big house price premium may want to consider focusing their search near an Aldi.

How much does a garden add to the value of your home?

London house prices: how much does a garden add to the value of your home?

A growing number of Londoners are turning their hands to urban gardening, and now a straw poll of agents suggests outdoor space can add up to £90k to the value of a home in the capital.

London is turning into a city of urban farmers. Almost one in four people with a garden devotes some outside space to growing their own food, according to a new study.

These numbers do not include the countless other growers in the capital who are turning their balconies and windowsills into vegetable gardens — and as estate agents know, gardens are not just good for produce, but also for adding value.

TV chefs, the warmer London climate, the growing popularity of organic food and the trend to relax and enjoy the de-stressing satisfaction of producing your own veg are encouraging this growing spree.

Last winter’s torrential rain in Spain and consequent shortage of lettuce, courgettes and other vegetables in British supermarkets earlier this year led to a run on seed buying. Crocus, a leading gardening website, reported sales of lettuce seeds increased 270 per cent year on year.

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