The housing market is gearing up for spring - a time which traditionally sees a lift in activity as people start to put their plans to trade up to another home, or their dream of climbing the first rung of the property ladder, into action.
Like spring last year, the UK property market is still in recovery mode. But what’s in store for 2015 - and how might this year be different from last?
Well, there are already signs that the shape of the recovery is changing compared with last year. Looking at the themes which are emerging could give us some clues as to what’s on the cards for 2015.
Firstly, last spring, many of the headlines were all about London. The city has been seen as the engine of the housing market recovery in recent years, and in 2014 there was some very strong price growth in many areas there. Much of the strong demand was driven by wealthy overseas investors, looking for a “safe haven” to put their cash. But this year, the focus has been shifting to other areas of the country, as the recovery has rippled out.
Property analyst Hometrack recently released a report into the UK’s main cities, in which it said that the momentum behind the housing market recovery is shifting away from some cities in southern England and towards ones like Liverpool, Sheffield and Glasgow.
Hometrack found that the housing markets in many of the UK’s main cities, including London, Aberdeen, Cambridge, Oxford, Bristol, Cardiff, Manchester and Birmingham, all reached a trough around six years ago, after which time, prices started to recover.
By contrast, property prices in Sheffield only started to recover around three years ago, while those in Glasgow, Leeds, Edinburgh, Newcastle and Liverpool have only been in recovery for two years and those in Belfast have been edging up for a little over 18 months.
The cities which only started their housing market recovery a couple of years ago tend to have house prices which are more affordable when compared with earnings, averaging between three and six times local wages, said Hometrack. This could give prices in these areas more wriggle-room to push up further.
In contrast, average house prices in London and Oxford have already surged to such an extent that they equate to more than 12 times local annual earnings, which is almost double the UK average of 6.3 times wages.
As the recovery broadens out, another theme as we move into spring is a tight supply of homes for sale. This means more people battling over fewer homes in popular areas.
Demand has already got off to a strong start this year. Property search website Rightmove saw more than 100 million visits to its website in January, a new record for the site. The busiest days the website has ever seen were on Sunday, January 25 and Monday, January 26 this year.
While the tight supply means that house sellers in popular areas could find themselves achieving a higher price for their home, the property they are trading up to could also cost more.
Rightmove puts the lack of supply down to several factors, including a reluctance among people looking to move to put their own property on the market as they can see few suitable homes to buy. The website even says that going forward, this tightness of housing supply could become “the new norm”.
Rightmove has pointed to a lack of homes generally, as well as an increase in homes being owned by buy-to-let investors, who tend to be buying a property as part of a long-term plan and are more likely to keep it for longer than an owner-occupier would.
Reforms which will give people aged over 55 more freedom over their pension pots from April onwards have prompted further enquiries from people to estate agents about the possibility of investing in a buy-to-let property to supplement their retirement income, Rightmove says.
Another factor which should help to keep the market chugging along this year is rock-bottom mortgage rates. A mortgage price war between lenders has grown fiercer this year, with many lenders offering their lowest ever rates on deals.
Some experts have suggested that the looming general election will make lenders particularly keen to do business in the early part of the year, due to the uncertainty of what will happen afterwards.