Welcome to the Wood & Pilcher January newsletter! In this edition; plans to build 200,000 new homes this year as well as the property predictions for 2017, private housing is worth more than the fortunes of all the worlds' billionaires and finally, how to set the right asking price for your property. 

Until next time,
Wood & Pilcher

The boss of Britain’s sixth-biggest house builder Redrow has declared 2017 the year the UK trade will demolish the 200,000 new homes barrier for the first time since 2008.

New “garden” towns and villages will be built across England in an attempt to alleviate the housing crisis, the Government will announce on Monday. The plans will deliver 14 new villages of between 1,500 to 10,000 homes to be built outside existing settlements.

Gavin Barwell said: “Done well, with genuine local consent, garden villages and towns can help tackle the housing crisis. They can be preferable to what is currently happening in too many parts of the country – poor quality developments plonked on the countryside, in the teeth of local opposition and in defiance of good planning principles.”

Theresa May’s first announcement of 2017 suggests her Government will make housing one of its main priorities in the year ahead.

The company’s chief executive, John Tutte, says the government’s announcement of a &2.3 billion Housing Infrastructure Fund, together with the unlocking of a number of brownfield sites, are likely to be key in achieving the May administration’s target of one million new homes in five years.

John Tutte said: ““The supply of land for housing is improving, with many local authorities now taking a more proactive approach in their area by identifying the number of homes needed to meet current and future demand and implementing plans to progress delivery”

He went on to say: “Analysis of our buyers also reveals their habits towards buying new homes. While our buyers favour new homes for the craftsmanship, low-maintenance lifestyle and 10-year NHBC guarantee they bring, they are also keen to live in a bespoke home that offers individuality, and in 2017 customisation will continue to be popular.”

New year resolutions may be losing popularity but new year predictions will never fall out of fashion. And the message that seems to be coming through is that 2017 will be a good year to buy.

One property index, Hometrack, showed that house price growth in London has slowed to its lowest rate in more than three years, while Savills said that the number of 25-year-olds who own their own home has more than halved in the last 20 years.

Despite the vote to leave the EU, most were confident that the property market hadn’t suffered. London saw a surge in overseas buyers taking advantage of the weaker pound and house prices in the UK continued to rise. This year will see another significant political change in the triggering of article 50 and as with any big change, there may be a level a lower activity and uncertainty around this period.

Some have predicted minimal to zero growth to prime property prices in 2017, while some luxury developers expect prime central London prices could drop by 1pc over the next year.

Other have higher hopes for the next 12 months, as the market adjusts to the “new normal” and buyers take advantage of low interest rates.

“History suggests years of low transactions are almost always followed by years of increased activity,” said James Evans, CEO of estate agency Douglas & Gordon.

Not forgetting Theresa Mays plan to build hundreds of thousands of new homes this year, granted not all will be complete but many first time buyers will be looking to get ahead and get a deposit down this year.

Television property expert Sarah Beeny, says: “The housing market has survived Brexit and the reduction in interest rates has made mortgages the most affordable they’ve been for years, so I think 2017 will be another good one for the property market.”

The Royal Institution of Chartered Surveyors (Rics) predicted 6% growth for 2016, and the ONS figures are not far off. Simon Rubinsohn, chief economist at RICS, said 2016 had been “characterised by the stamp duty change” in April. “The stamp duty impact has been a much bigger factor in the profiles of activity over the year than the referendum.” For 2017, RICS has forecast growth will fall by half, to 3%.

It’s no secret that house prices in the UK have seen strong growth over the last decade. With more than a 50% rise in the value of houses during a ten year period, the collective homeowners of Britain are now sitting on a fortune of &5.6 Trillion.

To put into perspective for you, that means the UK housing market is now worth that the entire collective fortune of the world’s 1,810 Billionaires.

According to Halifax, the total value of the UK’s privately-owned homes has jumped by &1.9tn since 2006. In the last year, the value of private housing stock has grown by &337bn.

Looking at the value of an individual property, the average value of a property has risen from &173,837 in 2006 to &241,682 in 2016. That’s a rise of &67,845 over a decade, or over &10,000 a year!

So what’s the cause?
In a report compiled by Halifax, the source of this dramatic rise in the value of properties is believed to have been caused by rising house prices and increased home ownership, which has led to an impressive rise in the amount of properties available being privately rented.

Property values have soared by 51% since 2006, which is significantly higher than the retail price index, which rose by 33% over the same period.
At the same time the number of homes currently privately owner has jumped from 21.3m to 23.1m.

London and the south east have seen the biggest increases in housing wealth with the partnership of strong price gains and rising numbers of households. The price of privately-owned housing in London has doubled from &655bn to &1.3tn, whilst the price of the southeast has risen by 61%.

Meanwhile areas like the east and Scotland have been on the receiving end of strong gains at 60% and 51% respectively.

However, despite the rapid rise in house prices the north-south gap has widened during the past decade, with the value of private homes in the south rising by 70%, compared with a gain of just 27% in northern ones.

Setting the asking price of your property can seem quite complicated. We’d all like these transactions to be done and dusted as quickly as possible and setting an appropriate asking price can really help wrap things up much quicker than if you choose to aim high and stand firm. To help, we’ve put together a quick overview of some of the points to consider when setting the asking price of your home.

A great starting point for the whole process is getting an appraisal on your home from your local estate agent. A good estate agent will be able to give you an honest opinion on your home with the added knowledge of how the local area is performing in general. If you had an appraisal more than 6 months ago, then it’s worth getting an up-to-date valuation, as it was recently reported that over the last year UK property values have risen 4.5% on average and the average asking price has risen by an average of 3.4%. 

Speaking to a local expert also allows you to gain some extra knowledge on what buyers are looking for in the area and what the specific pros and cons are of your home, giving you a better understanding of what makes your home stand out.

In addition to speaking with your local estate agent, you can also do a bit of research yourself, there are plenty of websites available today that provide you with information on the average prices that properties in your area sold for. 

Spend a little time taking a look at other houses in your area to see how your house stacks up, is your home slightly more modern? Have you added a conservatory or a garage? These extras matter when it comes to competitively pricing your home.

A useful approach to getting the asking price right is to decide on your selling tactic beforehand. Most sellers would assume that you should set your price slightly higher than what you believe the value of your home to be as you anticipate the buyer to try and knock you down a little.

However, if you set the price too high you could not only be pricing out a load of potential buyers, but you could end up with a house on the market for quite some time and the longer your house is on the market, the more likely a buyer is going to ask “what’s wrong with this home?”. If you’re going to price your home slightly higher than the rest, make sure it’s for good reason and you’ve taken into account all the previous research to justify the price.

Another tactic for pricing is to set the value slightly lower than your local competition. While this may seem like you’re setting yourself up for a loss, you could potentially create a bidding war between those looking for a bargain, which could lead to the price being driven up towards your intended sale price.

When pricing your home, it is also important to remember how buyers search for houses. The majority of buyers are likely to have a round figure in their head when it comes to their budget, e.g. &180,000. Therefor if you’re willing to sell your home at &175,000 but you’ve knocked up the price to &182,000 to leave room for negotiation, anyone with a max budget of &180,000 won’t even see your home when searching, meaning you miss out on a potential buyer.

Overall the main thing to remember when selling your home is that you can never have too much information on your area and your competition. The more research you carry out the better chance you have of getting the price right. 

As long as you use your new knowledge to your benefit and remain realistic about your property and the current state of the market, you’ll be able to set your asking price and negotiate with buyers with confidence that your home is priced appropriately.