Happy New Year

Welcome to our first newsletter of 2025. We would like to take this opportunity to wish everyone a happy, healthy and prosperous New Year.

It is at this time of year that we look back at the previous year to review what happened and use that, together with our market knowledge and experience, to forecast what 2025 will hold for the property market.

Looking back at our newsletter on January 5th, 2024, we signed off with the following message:

“We are certainly not getting carried away, but we are confident that we have turned a corner and the appetite amongst buyers and sellers is showing some positive signs of improvement early on in 2024”

None of us have a crystal ball, but it is clear that this message conveyed confidence that the 2024 property market would yield some good results and bounce back from what was a tough 2023.

We are delighted to report that 2024 did indeed prove to be a very positive year for the property market, in what can be best described as a’ resilient market’. To add context to this, here are some numbers.

New buyer registrations UP 19%
Viewings UP 9%
Sales Agreed UP 13%
Completed Sales UP 15%

As you can see from the above figures, our key benchmarks in 2024 were up on the previous year, and we celebrated what turned out to be our fourth best year of trading since opening in 2003.

On the hot topic of property values, we commented in January 2024 as follows:

“Depending on economic and world events, our prediction is that values will plateau for at least 12 months before we get back on the growth curve that we will undoubtedly see.”

The good news here is that prices did indeed plateau and better still, we saw an increase in values in the region of 2-3%, especially within the core market of properties marketed between £400,000 – £800,000.

What was clear in 2024, was that getting your asking price right was vitally important in the successful sale of a property. Our current research shows that on average in Chandler’s Ford 66.06% of properties that were listed for sale last year ended up with a price reduction. Two local agents had to reduce asking prices for 75% and 71.43% of their properties respectively. Here, at Sparks Ellison, we only had to reduce 32.48% of our properties, the lowest in the whole of Chandler’s Ford by some considerable margin. This is the only league table we are proud to be bottom of, demonstrating our ethos of giving honest and balanced advice from the outset. It is proven time and time again that getting the price right from the start achieves a higher sale price in the end, rather than being on the market for far too long or needing to reduce your asking price. We appreciate it is not an exact science, but as a trusted agent we see it as our duty to value a property honestly rather than under value it to sell it quickly, or over value to win the business.

This is backed up by further analysis of the market which shows that during 2024, we converted 89.4% of our properties listed for sale, to actual sales agreed, achieving an average of 98% of asking price. In contrast, the lowest placed agent only converted 53.4% (coincidentally the agent with the highest number of price reductions). The Chandler’s Ford average amongst the other five agents trading with premises in Chandler’s Ford was 65.69%.

As we have always conveyed, property ownership over the longer term always provides excellent returns. Our research shows some really interesting and healthy growth rates as follows in Chandlers Ford.

5 year growth 19.5%
10 year growth 47%
20 year growth 89%

Despite the positivity that exists, we could still do with some help from the Bank of England, and further reductions in interest rates would of course be most welcome for all mortgage borrowers. There are still thousands of people across the UK coming off low fixed rate mortgages and switching into much higher borrowing rates for whom the prospect of moving diminishes due to affordability. We feel this is particularly pertinent at the upper end of the market which in conjunction with increases in various rates of tax can make purchasing these properties difficult.

31st March 2025 will signal the end of the stamp duty breaks that were put in place a while back. As a result, we could potentially see the first few weeks of 2025 provide an increase in market activity, as many potential buyers will want to try and get their transaction over the line before the stamp duty changes come into play on April 1st. These changes will see a reduction in the first-time buyer stamp duty relief currently at £425,000 reverting back to £300,000 and the nil rate threshold return to £125,000 from £250,000. Increases in stamp duty from April 1st won’t help the market but this could be mitigated by further reductions in interest rates.

The rental market continues to be driven by tenant demand and over the last 12 months the average rent achieved for homes let in Chandler’s Ford was £1300 per month. This is a 7% increase on the previous 12-month period. Average gross yields for Landlords in that period were 4.9%. Landlords purchasing a buy to let property are also now faced with additional stamp duty charges announced in the budget last year, which are 5% of the whole purchase price plus the stamp duty at the going rate. These increases, coupled with the upcoming rental reform act have led to several Landlords selling which could lead to an increase in rents driven by less supply.

In summary, 2024 exceeded expectations, with a shift from negative to positive house price growth despite ongoing affordability challenges. Market metrics remain strong and with potential for lower mortgage rates and a strong appetite amongst buyers and sellers, we see modest, continued property price growth throughout 2025, and a healthy number of transactions completed.

Warmest wishes,

Adam and Mark

(Data and research provided by Dataloft, rightmove and The Guild of Professional Agents)