House prices: the best times to buy in 2015
12-31-2014
If you time your purchase right you could save thousands of pounds on your new home
Choosing the right month to buy your property could help you knock thousands off the asking price. Photo: Justin Sutcliffe
By Nicole Blackmore
Planning to buy your first home in 2015 or move up the property ladder? You’ve probably been keeping a keen eye on house prices, but you’ve also got to watch what other buyers are doing if you want to time the market well.
Historical data shows there are a couple of quiet months during the year when fewer houses are bought. During these periods there is typically a smaller pool of buyers, meaning competition is reduced and buyers have more bargaining power, particularly with sellers who are looking for a quick sale.
December and January tend to be slow periods because people are focused on Christmas and the cold, wet weather puts many off house hunting. In September many people are on holiday and the market slows again.
Even in unusual years such as 2014, when frenzied buyers flocked into the housing market, the Land Registry’s sales data and the Bank of England’s mortgage approval figures showed that this same rough pattern still applied.
If the same trends emerge in 2015, January could be a great time to buy a property.
We know that demand for homes has already fallen from its peak in July, when in some areas there were so many buyers bidding for properties that they sold for tens of thousands of pounds above the asking price.
As demand has fallen, so too has house price growth, with asking prices falling in some areas.
The most recent figures available from the Land Registry show that the number of properties sold in England and Wales in September fell to 73,552, down from 85,391 in August.
Land Registry monthly sales volumes
Source: Land Registry
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Sales volumes for the rest of the year will not be published until 2015, but the Land Registry's official house price data for November shows that average prices in England and Wales fell by 0.1pc in the month to £176,581.
Regionally, the West Midlands saw the highest monthly growth with prices 1.7pc higher, followed by London with 1.2pc growth and the South East with 0.3pc.
Prices were stagnant in the East Midlands and the North East, while in the East and Yorkshire & the Humber prices fell by 1.4pc and 1pc respectively.
This chimes with data from other industry bodies. The British Bankers’ Association this month reported that mortgage approvals for house purchases fell in November for the fifth consecutive month to an 18-month low of 36,717.
The Royal Institution of Chartered Surveyors’ latest survey reported a fifth successive fall in buyer inquiries in November and a fourth successive drop in agreed sales.
Add to this the current record low mortgage rates and it’s increasingly looking like a great time to buy a property.
Two-year fixed mortgage rates
WHAT COULD DISRUPT THE MARKET IN 2015?
There are a number of factors that could significantly affect prices in 2015.
The general election in May is sure to create uncertainty, which could push up the cost of wholesale funding for lenders on the money markets, and in turn increase mortgage rates.
The outcome of the election will also be critical – many buyers at the higher end of the market will be concerned about Labour’s proposed "mansion tax", which will apply to all homes worth more than £2m.
This would come on top of the stamp duty changes implemented by the Chancellor, George Osborne, earlier this month, which significantly increased the tax for buyers of expensive properties.
But it's not all bad news; the majority of buyers will benefit from the stamp duty changes. Anyone buying a property worth up to £937,500 – 90pc of buyers, according to Mr Osborne – will pay less tax.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the changes to stamp duty should provide “a modest fillip in the spring but we expect uncertainty around the general election to keep the housing market fairly subdued until after May”.
“Once the election result is known, we expect the pent-up demand from the start of the year to be released and the year overall to be a strong one, with around £215bn of lending,” Mr Harris said.
Rising interest rates could also affect house buyers. If the Bank of England decides to increase Bank Rate from its record low of 0.5pc, the cost of borrowing will rise.
Industry commentators are divided over whether there will be a rise in 2015, however, with many predicting that the first change will not come until 2016 at the earliest.