Looking forward to 2017 I can foresee a very similar trend in the property market. On the supply side there will continue to be a to few properties coming to the market as a consequence of the demographics of home owners and some added uncertainty provided by BREXIT. I do not feel BREXIT has significantly affected the the market with most agents reporting year on year transactions similar to the previous year. As an industry we have to also consider the rise of the internet estate agent which is spreading the limited supply over the available agents. This is a trend that will continue.
The challenge the traditional agents face is how to demonstrate the added value of their services against the “listing agency” services provided by the majority of internet agents. In a market that is in short supply and properties selling quickly it is difficult to show these benefits. For those agents that ‘just sell houses’ the financial consequences could be serious and we could see some small agents leaving the market.
As to house prices, with a continued shortage of supply agents will be competing not only on fees, but their valuations too. This will be the case for properties up to £500,000. Prices will therefore continue to rise for as long as buyers are prepared to pay the increase in prices. At some stage affordability will come into play, and will put a ceiling in this price trend. When this will happen is very difficult to say. For properties above £500,000 there is a more mixed picture. There are generally fewer buyers above the £500,000 threshold, at this level, and those inspirational properties, there are fewer buyers. This trend will continue, with the above £1,000,000 market, buyers are still fewer and very picky and only the best in their class will sell easily with a high proportion sticking on the market until the right buyer comes along.
In summary there will be little change in the market over the next 12 months. Prices will generally continue to rise with a general shortage of supply up to £500,000. Some agents with less diverse businesses will find the shortage of stock a real challenge.