The ‘meteoric rate of house price growth simply isn’t sustainable’

The widening supply-demand imbalance continues to place upward press on property prices, as reflected by the latest asking price data published this morning.

The average price of property coming on to the market is up 6.7% in just six months, and yet there could be more room for growth, according to some agents.

James Forrester, managing director of Barrows and Forrester, commented: “The availability of stock on the market is the lifeblood of the property market and if it’s significantly short in volume.

“As a result, we can expect to see prices soar ever skyward as demand continues to outstrip supply, regardless of the fact that the stamp duty bonanza may have finished.”

But now that the support from the temporary stamp duty relief has all but ended, the market is likely to slow, according to the founder and CEO of GetAgent.co.uk, Colby Short.

He commented: “The time it’s taking to sell a home has plummeted to just 38 days in June, an all-time low. However, it’s important to note that this is the time it’s taking to agree a sale, not complete it, and sizable delays remain at the final stage of the transaction timeline.

Short added: “We will inevitably see the market return to normality with demand diluting somewhat, price growth softening and time-to-sell increasing back to 45 to 50 days.”

Marc von Grundherr, director of Benham and Reeves, is not convinced that that housing market boom has run out of steam.

He said: “The UK property market continues to defy expectation, with house prices reaching yet another record high despite whispers of a decline in values as a result of the tapered stamp duty holiday deadline.

“There’s no doubt the stamp duty holiday has been the catalyst for this impressive market performance. However, it isn’t the driving factor behind the intent to purchase for UK homebuyers and so a robust level of activity will remain long after it has expired.

“When you couple heightened demand with a severe shortage of stock, it’s very likely that property values will remain buoyant for the remainder of the year, at the very least.”

However, Matthew Cooper, founder and managing director of Yes Homebuyers, is clear in his mind that the current rate of house price growth is not sustainable.

Cooper said: “History tells us that such a meteoric rate of house price growth simply isn’t sustainable. The past 12 months or so may well have been good for the property industry and for sentiment overall however caution now prevails as we enter a second year of wildly increasing property values – a bubble if ever there was.

“The spectre of higher inflation and the Bank of England potentially responding with the blunt instrument of an increase in interest rate rather adds to the peril.”

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6 Comments

  1. AlwaysAnAgent

    Who is Barrows and Forester?

    Before long we will be reading quotes from “experts” like Mrs Smith from 79 Jones Street, Nowheretown.

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    1. JamesForresterBF

      I don’t normally respond as busy dealing with my clients, on a development site or on media duties but since you have asked so nice I will give you the courtesy or replying.

      Firstly the name is Barrow & Forrester (2 R’s in Forrester) and we are a West Midlands and South Staffordshire Estate & Lettings agent. Established for over 6 years now and started off helping developers launch their projects which we still do today. We have expanded into what most would see as “normal house sales”, have a healthy lettings book and new homes division of the company.

      I (James Forrester – MD of the company) have been in property for 21 years – lost count of how much I have sold and as well as running B&F also have under construction 229 units in my development company – yes I am addicted to property. I have to admit I am surprised you have not heard of Barrows & Forrester as you are an avid commentator on PIE & we have featured across the press (local, national and trade) radio, TV approx 500 times already this year alone.

      Out of interest who are you since you don’t use your actually name?

      Also would just like to say ” Mrs Smith is a vastly underrated source of expertise” She does the PR 

      Have a great evening.

      James

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      1. AlwaysAnAgent

        I am sure you are world famous in the very small circles you move in. You have answered my question and it is exactly as I suspected – you run a small fairly nondescript agency in the shires. Same as 1000s of others in our sector.

        I can’t honestly say I like people who laugh at their own jokes but I am sure that you’re a good chap underneath it all.

         

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      2. PeeBee

        “Firstly the name is Barrow & Forrester (2 R’s in Forrester)”

        Erm… suggest it best you get your company name right yourself when pulling someone else up over it (1 ‘s’ in Barrows)

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  2. Essjaydee51

    Slightly unfair comment, PIE are damned if they do or don’t! Agreed, I don’t know ANY of them but it’s good to get other people on here rather than the usual suspects thus giving a bit of advertising for someone and their company for a change, after all if you or I used our real names they may say/ask the same thing Oh, except I live at number 78.

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    1. AlwaysAnAgent

      I am sure you are right SJD, although I didn’t say that I didn’t like his quotes. 
      Bring on Mr MacTavish from Kirkwall for his views on the local gannet population and how this is affecting interest rates … !

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