In the articles on the Romford property market, we like to provide an insight into the real story of what is happening in our Romford (and national) property market and address the misconceptions that some of the ‘doom monger’ media have been spreading.
Despite almost daily reports of a housing market crash since September 2022, the data shows that the British (and Romford) property market is doing OK.
So, let’s dive into the stats and start with the life blood of the housing market – new properties coming on to the market.
Nationally, 444,668 UK properties came onto the market in Q1 2024.
(Q1 = Jan & Feb & March)
Interesting when compared to 407,946 UK properties in Q1 2023 and the 7-year Q1 average (2017 to 2023) of 403,105 new properties on the market.
New properties coming onto the market are a vital bellwether of the property market.
Why? Well in 2008, the number of properties coming on the market in Q1 was double that of 2007, this meant supply (number of homes on the market) vastly outstripped demand and hence economics dictated, and house prices fell.
The balance of houses coming on the market and how many sell determine what happens to property prices.
So how do you know if we are heading for another Romford house price crash as we did in 2008 or not, as the case maybe?
Let me share a quick and easy way to find out before anyone else.
Initially, perform a Rightmove search in Romford and write down the number of properties for sale every week. Next, carry out the same search, yet this time include sold subject to contract properties and make a note of that. The difference between the two numbers will show the number properties sold subject to contract. The final step is to calculate the ratio between the first two numbers: i.e., what’s available versus what’s been sold.
If the ratio of sold property to available property rises monthly, the market is improving. If the ratio is falling, the market is slowing.
If you really wish to go deep into this; you could split the search into property type (and bedrooms) you are selling and buying e.g., detached, semi, terraced/town house or apartments. This will help you to judge demand and supply and time the market to your advantage.
Next, looking at house sales nationally, 302,382 properties sold (stc) in Q1 2024.
However, the devil is in the data. Comparing with previous stats, in Q1 2023, 276,482 properties sold stc whilst the 8-year Q1 average (2017 to 2024 inclusive) was 304,363.
Obviously, the medium term 8-year UK average includes Q1 2021, where 397,402 properties had sold stc and Q1 2022 when 341,888 properties sold stc. Both of those years were exceptional; however, when we compare Q1 2024 to the Q1 average of 2017/18/19/20, a more reasonable 282,488 houses were sold stc on average.
Next, I wish to look at what is selling nationally by price band.
- 35.4% of the properties that came on the market in Q1 2024 were up in the price band up to £250k, yet 42.9% of the home sales (SSTC) were in this band.
- 41.0% of the properties that came on the market in Q1 2024 were in the £250k to £500k price band, yet only 39.6% of the home sales (SSTC) were in this band.
- 13.4% of the properties that came on the market in Q1 2024 were in the £500k to £750k price band, yet only 10.7% of the home sales (SSTC) were in this band.
- 5.1% of the properties that came on the market in Q1 2024 were in the £750k to £1m price band, yet only 3.7% of the home sales (SSTC) were in this band.
- 5.1% of the properties that came on the market in Q1 2024 were in the £1m + price band, yet only 3.1% of the home sales (SSTC) were in this band.
Looking locally at the Q1 stats, starting with the number of properties in the Romford area (RM1 to RM7) that came onto the market in Q1 2024 …
941 properties came onto the market in Q1 2024 in the Romford area.
The average price of those Romford properties coming to the market was £467,597.
The price range/band that saw the most listings was the £400k to £500k range, where 224 Romford area properties came onto market (followed by the £500k to £600k range, where 150 properties came onto the market).
Now, looking at sales in Romford …
697 properties were sold in Q1 2024 in the Romford area.
The average price of those Romford properties selling was £424,969.
The price range/band that saw the most sales was the £400k to £500k range, where 228 Romford area properties were sold (followed by the £500k to £600k range with 90 Romford area properties sold subject to contract).
Typical first-time buyer properties are leading the recovery.
Although economic turbulence remains, the UK property market is gradually moving towards pre-pandemic activity levels.
Some of you might have noticed with the national listings and sales figures mentioned above, that the lower priced range of properties are performing better than the higher priced properties. For example, just over a third (35.4%) of UK listings were £250k or below, yet that price band accounted for over 1 in 2.3 house sales (42.9%). Meanwhile, at the other end of the scale, 8.9% of listings in the UK in Q1 '24 were in the £750k to £2m price band, yet only 6.2% of the sales were in the same band. In the £2m+ price range, even though the numbers are very small, the difference is quite startling, 1.3% of listings were £2m+, but only 0.55% of sales agreed were in the same range.
So, what does this all mean for Romford homeowners wanting to sell in this market?
Realistic pricing when you put your house on the market is everything!
In Q1 2024, there have been 198,682 price reductions on the 633,417 properties on the market.
In comparison, there were 243,602 price reductions in Q1 2023 on the 590,481 properties on the market and 119,068 price reductions in Q1 2022 on 424,796 properties on the market.
It is better to come on the market at a realistic price to start when the property is fresh to the market, than go on at a high price, lose that initial honeymoon period and then reduce it, only for some people to wonder what was wrong with the property.
Although higher mortgage rates and economic headwinds present challenges, many potential Romford home buyers who were effectively side-lined in the fierce bidding wars of 2021/22 will find that a slower paced Romford property market gives them time to plan a strategy for their next move as we go into the traditionally busy post-Easter house buying season.
While the demand for quality Romford houses is still healthy, if the asking price is above the current market, sellers may need help finding buyers.
Determining a realistic price is crucial but not easy. Many sellers look at similar properties on property portals, but those prices may be over-inflated.
Estate agents have more tools at their disposal, such as comparing sale prices for comparable properties, £/sqft and thinking about prospective purchasers in the market for the type of property under valuation.
Although getting the price right can be difficult, revising it downwards quickly is essential.
Romford homeowners should ensure that their property looks better value for money than similar properties. If you plan to trade up, it is good sense to sell at realistic prices, as you will gain substantial savings compared to moving in the last few years.
However, if you don't need to sell urgently, becoming a landlord could be an option - again I can help on that if needs be. Nevertheless, Romford homeowners-turned-landlords should consider that if property values do drift downwards in the coming 12/18 months, it may take a few more years after that to recover to those values seen last year.
Whatever the rest of 2024 brings, moving home should mostly be based on your circumstances and not solely on what is happening to Romford property prices.
If you would like an informal chat about your potential move without any obligation or cost, get me around for a chat. I promise I will tell you like it is, without any guff – then you can decide what is best for you and your family.
In the meantime, do let me know your thoughts in the comments. Call Gary Taylor on 01708 504455 or email gtaylor@gbpestates.co.uk