The Christmas and New Year period can often bring vital momentum to the housing market as people choose the start of January to finally make the move that they have been mulling over throughout the previous months. A brighter than expected January 2010 has exceeded expectations however and the buoyant start to the year has seen house prices rise by 1.2%.
There has been a string of positive, if quirky, stories about the propery market this week with news that a house boat in Chelsea is for sale at a cool million pounds and that a rather ramshackle beach hut, sans door, has sold for £40,000. Taken in themselves they could be an indicator that the silly season of news has arrived early but when seen as part of a wider picture they indicate a growing optimism that there is light at the end of the recessionary tunnel.
The 1.2% rise occurred in the first week of January 2010 and the five weeks leading up to January 9th revealed a healthy overall increase of 0.4% in the price of housing, giving a UK average house price of £222,261.
Estate Agents and property websites across the country have been surprised by the rise that has bucked the trend of gloomy predictions and less bright economic indicators from other sectors.
Miles Shipside, Commercial Director of the property site Rightmove talking to The Telegraph today, said: “This rise in asking prices is an early indicator that new sellers in 2010 have the confidence to try for a higher price, as the index was lined up for a fall until the turn of the year.” Mr Shipside went on to explain that the optimism of these January buyers had helped to reverse a predicted 1% fall in house prices.
It seems that this is the first ray of light, a possible silver lining, peeking out but there are still two large, dark clouds looming threateningly overhead. The recession is holding onto the UK for longer than expected and rising inflation and unemployment could prolong the fiscal malaise. The General Election, due in Spring or Summer 2010, is also casting a pall of uncertainty over the medium term future of the market as potential buyers may wait to see what impact a new government has on their wallet before committing to any significant spending. In these times, however, we must be thankful for all good news and I for one believe that these encouraging January figures are the precursor for a year of sustained, and better than expected, growth for the housing market.