- Thu 23 Jan 2020
As Managing Director for Bradleys Estate Agents with 31 offices covering Somerset, Devon and Cornwall I can truly say that as a summary for 2019, the property market functioned very well with a good balance between buyers and property coming to the market. That also meant modest property price growth of between 1 and 3 % regionally. Despite political turmoil, largely over Brexit, people in the South West went around their daily business as per normal. The closer you got to London however the more downbeat buyer sentiment became with many areas in the Capital seeing property price deflation. In a reversal to this, very early indicators in the London market suggest that there is renewed buyer and seller confidence in 2020. This can only increase buyer demand in the South West from those very people leaving the South East and London for the West Country, a part of the market that was subdued over the last 3 years. What does that mean for our regional market place?
Well that depends. It takes two to tango in any market place. If we are to see increased buyer demand but only the same levels of property coming to the market place as 2019 this could mean an above average price hike in property prices especially at the higher end for those properties above £750,000. It will also mean a good year for developers who are creating homes to meet this demand. If, however, more people (perhaps put off by political uncertainty between 2016 and 2019) decide this is the year to sell their house in the South West then this will result in yet again a year of balanced demand and supply with modest price growth. Our own experience just three weeks into 2020 suggests that more property than normal will enter the market place in the first quarter of the year as property valuations from this time last year are definitely up.
Another important trend to look out for is operating at the first time buyer end of the spectrum. We saw a 65% increase in first time buyer purchases in 2019 over 2018. We see no reason why this won’t continue in 2020. Much of that activity was as a result of the government backed Help to Buy Scheme on new homes sites but we also saw a lot more transaction backed by the “Bank of Parents” providing deposits for the children who have earning power but no savings.
For those who are interested in how consumer habits are changing in the property market here are two patterns of activity worth sharing at this point. Bradleys have doubled the sale of property by means of online auctions 2018 to 2019 which will continue to grow into 2020. Based mainly at the lower end of the market, this method of sale greatly speeds up the selling and buying process and has gained traction with many customers who want an easier selling/buying process. On average it has also meant vendors have achieved 8% more than the guide price throughout the year. Another strong pattern is that both buyers and sellers want to do business out of normal hours when it suits, normally after 6 pm week days and on the weekend. Bradleys customer experience team who operate a fully functioning service up to 10pm and all weekend have seen significant growth in customer activity especially in 2019 and we only see this trend becoming more important in what is an increasingly a 24 hour economy.
Perhaps the most revealing trend which we can now share with everyone is around the resilience of the Cornwall property market. Historically the Devon property market has operated at a level above Cornwall in terms of price growth and the time it takes to attract a buyer to a property. After the first quarter of last year Bradleys sensed a gear change with economic confidence in the Cornish property market and now, collating statistics for the whole of last year, Cornwall has outperformed Devon on both timescale and price growth indicators. I will leave readers to decide why this may have happened and if it is sustainable into 2020?
To summarise for 2020, we are confident that there will be an uplift from 2019 in the number of property transactions that take place. We believe that both the upper end and first time buy market place will become more dynamic. We also sense that the rental market in terms of supply will increase after the well documented tenant fees ban came in 2019. Our forecast for new homes sales is positive yet we also stress that we don’t see a property boom nor do we see a serious down turn in 2020. It will be a year of business as usual but with a spring in its step with renewed confidence!
Bradleys Managing Director