UK private rental sector landlords more secure, new research suggests

Landlords in the UK are reporting that the incidence of void periods are falling, which is good news for the wider private rented sector.

It isn’t just the incidence of voids that are decreasing, indeed the duration of the average void period is falling too, according to research by BDRC Continental commissioned by Paragon Mortgages.

Some 34% of landlords said they had experienced at least one void period in the last quarter of 2013 compared with 36% in the third quarter. The average duration of a void period was 59 days in the final quarter of 2013 compared to 64 days in the third quarter and 69 days in the second quarter.

Landlords were also asked, where they had experienced a void, how they cover the financial impact. Those small scale landlords with only one property were more likely to cover any shortfall using either their own savings (17%) or from other income (19%).

A quarter of all landlords said they would cover it with rental income from other properties, 10% would look to absorb it and 16% would use cash reserves that had built up whilst the property was occupied.

‘It is good to see that void periods are less frequent and getting shorter. What is also important to note is the resilience of landlords when coping with a shortfall of income on an individual property, this provides further insight into just why the credit quality of buy to let lending is so much better than regular mortgages,’ said John Heron, director of mortgages at Paragon.

The same research revealed that landlords experienced a reduction in the level of tenant arrears in the fourth quarter of 2013. The average number of tenants in arrears remained low at around two against a portfolio size of 11 properties.

Of those landlords surveyed, 28% of landlords said that they were concerned about rental arrears in the next 12 months.

In terms of other areas of concern for landlords, 31% said that they had property which had been damaged by tenants and 15% had problems with anti-social behaviour.

The survey also shows that landlords are more secure financially with just 1% of landlords saying that they had missed a buy to let mortgage repayment in the fourth quarter of 2013.

UK mortgage industry expects the early demise of Help to Buy phase two

Mortgage lenders and brokers have credited the second phase of Help to Buy with the biggest impact so far of the government’s flagship two part scheme for home owners but are now predicting an early end to the popular scheme.

One year on from the policy's unveiling in the 2013 Budget, new research from the Intermediary Mortgage Lenders Association (IMLA) uncovers widespread expectations that this second part of the scheme will be curtailed ahead of schedule.

IMLA’s latest Intermediary Lending Outlook  report reveals a consensus that the second phase of Help to Buy has been the most critical factor in boosting access to 95% loan to value (LTV) mortgages to date.

Some 78% of brokers and 77% of lenders see this part of the government scheme as a major driver in improving conditions for borrowers with 5% deposits.

Significant numbers also credit Help to Buy with a key role in boosting the appeal of new build homes through its equity loan offering with 69% of lenders and 51% of brokers supporting this view.

Overall, brokers judge Help to Buy to have been more influential in restoring confidence among builders than consumers. Some 50% see it as a deciding factor in boosting the outlook for the construction industry, compared with 42% for consumers. In contrast, 45% cite a wider range of factors behind the return of consumer confidence.

The report also shows that over inflated house prices remain the number one threat to the success of Help to Buy according to brokers and lenders. IMLA’s recent report What is the new ‘normal’? demonstrates that mortgage lending volumes are far below historic levels in real terms, yet these new findings suggest the industry recognises the need to monitor house price growth over the duration of Help to Buy.

Unattractive mortgage product pricing is the concern which has grown the most since last summer, with 51% of brokers citing this as a threat compared with 36% in July 2013. A number of lenders have launched competitive mortgages at 95% outside Help to Buy, which helps to explain why an over-reliance on government support has become less of a worry overall.

Half of brokers and 49% of lenders predict that the mortgage guarantee scheme will be withdrawn early, despite its perceived impact so far. Even more, 54% and 75%, expect that the scheme will be withdrawn early for remortgages, which are currently allowed under the scheme for customers transferring their existing loan to a new lender.

Despite these predictions, all lenders 89% of brokers see 95% LTV mortgages as an essential part of a healthy mortgage market. Such loans were an established part of the UK mortgage market before the downturn and Help to Buy has helped to stimulate a recovery in the number of 95% LTV products available.

The Help to Buy equity loan scheme for new build homes is judged to have the biggest chance of being extended beyond its current end date of March 2016. Some 23% of lenders and 18% of brokers expect to see this part of the scheme prolonged.

‘These findings throw the spotlight on crucial policy decisions that must be thought through to safeguard the recovery in mortgage lending and house building. The overall Help to Buy scheme has delivered a much needed boost over the last twelve months and we would certainly be looking at a more subdued supply situation without it,’ said Peter Williams, executive director of the IMLA.

‘In particular, Help to Buy 2 has helped to reopen the higher LTV market after the downturn. This has done much to transform the hopes of first time buyers who can afford a mortgage but struggle to save an initial deposit. There are few clearer drivers for more homes to be built than aspiring buyers returning to the market,’ he pointed out.

‘The Help to Buy factor has been important in getting growth underway, restoring a sustainable market and moving us towards a position where consumers can access affordable loans without the need for government support. Whether or not the scheme runs its full course is less important than making sure we have a self sustaining market in place going forward. The evidence suggests that we have an entrenched mortgage market recovery which can survive its withdrawal,’ he explained.

‘However, situations change and the industry is facing a considerable uplift in regulatory controls over the next two years. It will be essential to track how those bed in and what their consequences are for specific market segments. Armed with that understanding we can then be much clearer as to how and when we might best phase out the government schemes,’ he added.

According to Simon Crone, vice president for mortgage insurance Europe for Genworth, the difficulties facing first time buyers have not been resolved by any stretch of the imagination. ‘Housing inflation is set to make that first step onto the housing ladder an even greater challenge for many. We need to ensure that responsible borrowers who would struggle to save 10% or 20% deposits are not forgotten when Help to Buy comes to an end especially if this happens sooner than expected,’ he said.

‘The IMLA research emphasises that 95% loan to value mortgages are a crucial part of the mortgage product range. Directly or indirectly, the government guarantee has worked wonders to improve consumer choice. Insurance gives more lenders the confidence to support buyers who are only able to save a smaller deposit, and a bigger role for private schemes would remove the risk to taxpayers and end the reliance on government,’ he pointed out.

‘The growing number of 95% mortgages launched in the last six months with ever more competitive rates has relied on a combination of insured and uninsured products. Even if Help to Buy 2 fulfils its term and runs until 2016, planning needs to begin now so that change doesn’t upset the balance and lenders don’t desert the market. Lenders and builders need the government to outline its thinking now and present a longer term, viable solution to support responsible borrowers with smaller deposits,’ he added.

Property price discounts in UK at lowest level for four years

The proportion of UK properties currently on the market for sale with a reduced asking price has fallen to its lowest level in four years according to new research.

The latest report from property website Zoopla shows that of all properties currently available for sale, only 27% have had their asking price reduced from their original level.

This is down from 31% three months ago and significantly below 2011 when 40% of properties on the market were being discounted in order to attract a sale.

It also shows that the size of the average price reduction has also fallen over the last three months with motivated sellers now offering average discounts of 6.25% or £20,782 off the original asking price, down from 6.45% or £21,451 in November.

Wakefield tops the list of places with the highest proportion of price reduced properties on the market today, with 42% of homes for sale there having been discounted from their original level.
Barnsley at 38% and Rotherham at 37%, come in second and third on the list of places with the highest level of motivated sellers. The biggest discounts can be found in Newcastle upon Tyne, where the average asking price reduction currently stands at 8.9% or £19,425.

London comes top of the list of places with the lowest proportion of discounted properties on the market. Of all the homes currently for sale in the capital, only 15% have seen their asking price reduced from their original level.
 
Edinburgh at 20% has the second lowest proportion of discounted properties with Coventry in third place currently at 24%.

‘The government’s Help to Buy scheme, increased availability of mortgages and confidence in the economy have all helped to invigorate the property market at the start of 2014. This has driven a rise in demand among buyers and helped reduce the pressure being felt by sellers to discount their properties, particularly in London, where competition for quality property remains fierce,’ said Lawrence Hall of Zoopla.

‘While this is good news for sellers, buyers need to see more stock come onto the market over the coming months otherwise the recent trend of rising prices is likely to continue as spring takes hold and more buyers decide to search for property and create further competition,’ he added.

Aberdeen named as UK property hotspot with homes selling in just nine days

Aberdeen is the UK’s new property hot spot with properties in parts of the city selling in an average of just nine days, new research shows.

Three Aberdeenshire postcodes took the lead as the fastest selling hot spots with a further three featuring within the top 20, according to the latest research report from residential property company Move with Us.

The research, conducted in conjunction with Home.co.uk, reveals that properties in postcode areas AB22 are selling in an average of just nine days, with AB12 and AB32 taking second and third places.

Other fast moving locations in the UK were Sutton near London where properties in the postcode SM5 are selling in just 15 days. This was closely followed by CB1 in Cambridge and BS7 in Bristol with 16 and 18 days respectively.
 
The highly skilled workforce in the leafy city of Cambridge combined with fast commuter times to London are cited as reasons for its quick property sales. The shortage of properties for sale combined with increased buyer numbers due to Help to Buy have created a fast paced market in Bristol, according to the research report.

It will come as no surprise that properties in London were also among the fastest sellers in the county, with the top areas being SE2 in Bexley, SE17 in Southwark and EC4 in the City of London, taking an average of 13, 17 and 20 days to sell respectively.

‘The postcodes in the top 20 highlight areas where there is a skilled workforce, indicating higher wages and subsequently a fast paced property market,’ said Robin King, director of Move with Us.

‘In such a fast moving market, for a buyer to be in with a chance of securing their ideal property, they will need to ensure they have a mortgage agreed in principle and are legally prepared early on in the process so that contracts can be issued by their solicitor within 48 hours of an offer being accepted. Without these things in place, buyers will often lose out to cash buyers and savvy investors,’ he explained.

According to Bob Fraser, Senior property partner from law firm Aberdein Considine, demand in the current market is predominantly in flats anywhere within a commutable distance of Aberdeen.
 
‘The region attracts a large number of highly paid workers in the oil and gas industry. Due to high rental yields in the region, the higher level workers in the industry often buy property and lease it to the newcomers who are often on shorter contracts,’ he said.

‘Over the last few years the top end of the market has been driving sales in the area with an increase in the number of four to six bedroom family homes being built which are marketed in excess of half a million pounds. These move in slightly slower timescales than flats,’ he pointed out.

‘Now the market has returned to a more traditional model with lower end properties driving sales. “Off the back of a busy autumn we now have over subscribed demand and a shortage of supply of properties which means properties are selling extremely quickly,’ he added.

Millions of first time buyers want to buy a home in the US, new index shows

More than four million first time buyers want to enter the housing market in the United States in 2014, buoyed by strong housing market confidence, it is claimed.

Home ownership aspirations is highest among people who are currently renting their homes and in markets hardest hit by the housing recession according to a new index from Zillow.

The firm’s inaugural Housing Confidence Index stands at 63.7 and it shows that if all renters indicating they want to buy a home in the next year actually did, it would represent more than 4.2 million first time home sales.

Renters in Miami, Atlanta and Las Vegas expressed the most desire to become home owners and but their aspirations are unlikely to be realized soon as home ownership headwinds persist, the firm points out.

Barriers include tight inventory, rising mortgage interest rates and growing affordability problems in a handful of areas, and these may make it difficult for potential buyers to follow through on those aspirations as the market enters the busy spring home shopping season.

In 19 of the 20 large metro areas surveyed, more than 5% of all residents indicated they wanted to buy a home in the next year. Among current renters, homeownership aspirations were particularly strong, with about 10% of all renters nationwide saying they would like to buy within the next 12 months.

The vast majority of these respondents also said they were confident or somewhat confident they could afford home ownership now.

If all renters that indicated they wanted to buy actually did purchase a home in the next year, it would represent more than 4.2 million first time home sales, more than double the roughly 2.1 million first time home buyers in 2013.

While inventory is up 11.1% nationally compared to a year ago it still remains well below optimal levels, and has fallen year on year in eight of the 20 metro areas surveyed by the index.

Zillow also points out that recent data from the Census Bureau indicates that the share of new homes built as rental units has grown, while the share of new construction dedicated to the kinds of single family homes likely to be favoured by first time buyers is down.

Mortgage interest rates are also on the rise, currently standing at about 4.2% nationally, according to the Zillow Mortgage Marketplace, well above 2013 lows of roughly 3.3%.

And as interest rates rise, homes in a number of particularly hot markets, including San Francisco, Los Angeles, San Jose and San Diego, are already looking unaffordable for buyers with lower incomes, especially first time buyers, as more income is devoted to mortgage payments.

‘For the housing market to continue its recovery, it is critical that homes are both available and remain affordable to meet the strong demand these survey results are predicting, particularly from first time buyers,’ said Zillow chief economist Stan Humphries.

‘Even after a wrenching housing recession, this data shows that the dream of homeownership remains very much alive and well, even in those areas that were hardest hit. But these aspirations must also contend with the current reality, and in many areas, conditions remain difficult for buyers. The market is moving toward more balance between buyers and sellers, but it is a slow and uneven process,’ he explained.

While it is reassuring to see all of the headline indices in positive territory, the underlying indicators of home ownership aspirations, housing market conditions and expectations for each metro area and tenure segment reveal significant variability,’ said Pulsenomics founder Terry Loebs.

‘Several of these drivers of overall housing confidence registered negative or only marginally positive readings in some cities. These data confirm that real estate recovery and economic healing are relative, local phenomena, and in some instances, likely reflect the lingering psychological impact of the housing bust,’ he added.

Shortage of property in the UK means eight new buyers after every new instruction

Eight new buyers are chasing every new property instruction in the UK and new buyer registrations have risen by over quarter, according to new research.

The report from Sequence, owners of over 300 branches of estate agents around the country shows just how buoyant the residential real estate market is.

It points out that the average UK house price has increased by 12% annually but did fall 1% in February compared with the previous month. Sales are also rising, up 17% annual and 7% month on month.

According to the firm’s data the average house price is now £207,412. But prices have been rising even more in London, up 22% annually, but they were down 4% month on month. Nevertheless, the average house price in London is now £441,256.

First time buyers are not being put off by the house price rises and mortgage applications from first time buyers were up 7% month on month in February, and up 13% annually. The firm says that new buyers are flooding the market.

Sellers are also boosting the market, and mortgage applications from this group are up 5% month on month and 18% annually.

‘Activity in the market and competition for property across the country is heating up as we edge closer to spring. Fuelled by attractive mortgage products, the number of new buyers registering has risen by 26% annually and there are now eight buyers chasing every new instruction,’ said David Plumtree, chief executive at Sequence.

‘The shortage of available property is resulting in rapid price growth, with the average UK house price now 12% higher than this time last year and showing no signs of slowing down unless the supply/demand imbalance is rectified,’ he explained.

He also pointed out that in London over 13 new buyers continue to compete for every new instruction, with the number of new buyers registering increasing by a quarter, annually. The number of new instructions is rising by just 13% as prices continue to grow, up 22% annually.

‘With the Government’s redirection of finance from the Funding for Lending Scheme and interest rates expected to rise sooner rather than later, home owners considering selling should seize the window of opportunity now,’ he added.

Upward trend in new buyers in the UK easers off, surveyors report

The continuing increase in would be buyers in the UK eased off to the lowest point in almost a year during February, as the initial clamour from those previously shut out of the property market started to relent, a new survey shows.

Last month buyer numbers increased at their slowest rate since March 2013 as the initial surge in demand, driven by the more accessible housing market, started to slowly level off, according to the February Residential Market Survey from the Royal Institution of Chartered Surveyors (RICS).

It reveals that this trend was seen across most areas of the country with only Yorkshire and Humberside seeing anything by way of meaningful increases in buyer growth, and that followed a flat January in the region.

Perhaps unsurprisingly, activity was particularly limited in regions in the South West where flooding and adverse weather conditions appear to have significantly hit both the supply of properties coming up for sale and buyer demand. It remains to be seen what impact the floods will have on local and regional markets over the coming months.

Once more, the amount of homes coming up for sale failed to pick up and, although buyer demand is gradually starting to slacken, supply is still falling well short of required levels.

Moving on to prices, the cost of a home in the UK continued to rise during February, albeit at a slightly slower pace than in previous months. Last month 45% more chartered surveyors saw prices rise rather than fall. The cost of a home has now risen across the country for 11 consecutive months.

Looking ahead, respondents predict both prices and transaction levels to continue to increase as we enter the summer months where the market traditionally starts to pick up.

‘The growth in buyer numbers that we've seen for some months started to slow down in February, as the surge in interest sparked towards the end of last summer began to level off.,’ said Simon Rubinsohn, RICS chief economist.

‘While this certainly doesn't mean an end to the increasing activity we've been seeing recently, it does suggest that the pent up demand generated throughout the downturn is gradually exhausting itself. One other factor influencing behaviour over the past month may be the weather as rain, wind and, in particular, floods tend to mean fewer people are willing to actually get out there and view houses,’ he explained.

‘The ongoing issue that we are facing, however, is the lack of homes coming onto the market. Yes, it is true that more and more are being built, but supply is simply not enough properties to satisfy demand. As a result, prices are likely to continue to move higher making it ever harder for people to take an initial step foot onto the property ladder,’ he added.

Help to Buy for new homes in UK to be extended to 2020

The UK government’s flagship Help to Buy scheme phase one is to be extended until the end of the decade, it has been announced.

The scheme which allows buyers of new homes to access a government backed loan of up to 20% of the cost of a property has been hugely popular and credited with boosting the real estate recovery.

Chancellor George Osborne has confirmed the move ahead of his Budget which will be presented to Parliament later this week.

He told the BBC that the Help to Buy scheme phase one which was due to end in 2016 will no be available until 2020.

He also confirmed that the UK’s first new garden city for 100 years will be built in Kent and initially create 15,000 new homes. The site chosen is at Ebbsfleet.

He is expected to announce on Wednesday that he fully backs the upturn in construction in the property world and that getting Britain building is regarded as a key to helping the economy improve even more.

He said that the extension of Help to Buy will support the construction of 120,000 new homes. But others have already warned against such a move, most notably Bank of England governor Mark Carney who feels it needs to be watched to avoid a property price bubble, especially in London and the South East of England where prices are rising faster than elsewhere in the country.

Under Help to Buy, the government lends a prospective home buyer up to 20% of the cost of their new build home so a buyer needs only a 5% cash deposit and a 75% mortgage to make up the rest.

The extension applies only to the first phase of the scheme, which is for new build homes. There is likely to be no changes to phase two of Help to Buy which provides mortgage guarantees for banks lending to buyers with small deposits.

Grainne Gilmore, head of UK residential research at Knight Frank, said that the decision to extend the Help to Buy equity loan will be welcomed by house builders. 'The extended time frame of the scheme will aid the progression of larger and longer term development schemes, crucial in helping boost house building to levels that the government wants to achieve,' she explained.

She also pointed out that the take up of the scheme so far is fairly evenly spread across the country, with the most equity loans being taken out in Leeds, suggesting that it is providing broad based support to house building across England.

'The question now is whether the Chancellor will adjust the parameters or the £12.5 billion set aside for Help to Buy part 2, the mortgage guarantee, to cover the additional £6 billion cost of this four year extension to the equity loan,' she added.

According to the latest figures, nearly 15,000 properties have been bought using the Government’s Equity Loan since April last year. The new data shows that, in January, nearly 2,000 mortgages were agreed across England using the scheme, a slight slowdown compared to the final three months of 2013 when some 7,500 mortgages were agreed, an average of 2,500 per month.

Meanwhile the property indistry, including the Royal Institution of Chartered Surveryors (RICS) and the National Association of Estate Agents (NAEA) is calling for changes to Stamp Duty, stating that it will help to boost the property market.

They both point out that it is a tax that is unfair and hugely expensive and that its slab structure is actually restricting home ownership.

Some industry players believe that thresholds at the lower end of the market need particular adjustment as they clearly need bringing in line with the up to date value of property prices. One suggestion is that properties valued up to £250,000 should be changed to 0% and then a flat 2% on anything over this price. They add that although the amount raised from each property will go down overall it will even out due to the rise in transactions.

Property value growth in Australian capital cities slows, latest monthly index shows

Residential property value growth in capital cities in Australia didn’t really move last month with the market pausing for a breather, according to the latest RP Data Rismark home value index.

The combined capital cities index recorded no change overall during February with Sydney, Hobart and Darwin the only capital cities to record a slight lift in dwelling values.

The index recorded zero month on month growth. This follows eight successive monthly increases where dwelling values rose by 10% and values are up 13.2% since June 2012. Also, recent growth has taken capital city dwelling values to 4.8% higher than their previous peak in October 2010.

‘The February market results are in stark contrast to earlier readings where capital city dwelling values moved 2.6% higher over the past three months. The likelihood is that the weak reading for February is an adjustment from the strong readings in December and January rather than the beginning of a flat to negative growth phase across the macro level housing market,’ said TP Data research director Tim Lawless.
Additional metrics tracked by RP Data show that buyer demand remained very strong in February with RP Data’s valuation platforms recording a record month for average daily levels of mortgage related activity. Also, auction clearance rates remained strong and with little slippage in vendor discounting levels or average selling times. 
However, Lawless said there will need to be further months of flat to negative movements before it can be said confidently that the housing market is slowing.

‘Our view is that housing market conditions will start to wind down later this year as affordability constraints and low rental yields dampen market conditions. Additionally, with a belief that mortgage rates are likely to start tightening later this year, it may help to quell some of the exuberance we have been seeing,’ he explained.
Rismark International chief executive officer Ben Skilbeck, pointed out that Sydney continued to be the standout performer. ‘When looking at individual capital cities, the Sydney market has had a surprising run of nine successive month end increases totalling 14.1%. In keeping with what other capital cities have experienced, we would have expected some dips along the growth trajectory over a nine month period,’ he said.

‘Despite the recent strong Sydney capital gains, over the past decade Sydney values have compounded at just 2.9% per annum. Arguably this market is playing catch up before settling into a more sustainable rate of growth,’ he added.
The February results show that the premium end of the housing market continued to gather pace while at the more affordable end of the market, capital gains have been slowing.

Dwelling values across the most expensive quarter of capital city housing markets are up 3.8% over the three months to February 2013, and 6.8% over the past six months while homes at the most affordable end of the market have seen values remain flat over the past three months and have risen by a lower 3.5% over the past six months.

Lawless said the stronger performance of premium properties as the growth cycle matures is typical. ‘We saw the same trend in 2009 where the most expensive market also recorded the strongest capital gains, as well as during the 2007 growth cycle. The trend is likely being compounded by the low number of first home buyers active in the market place who normally drive demand at the more affordable price points,’ he explained.

Although rents are rising, rental yields have suffered over the past growth cycle due to capital gains outpacing rental markets. The bi-product of strong capital gains combined with less impressive rental growth has been yield compression.

‘Since June 2012 dwelling values are up slightly more than 13% while rents have risen by less than 5%. Gross dwelling yields have slipped from 4.3% in May 2012 to 4% and are as low as 3.4% for the typical Melbourne detached house,’ Lawless pointed out.

Looking forward, Skilbeck said that uninterrupted successive month on month increases are unlikely even in the event positive market environments and high auction clearance rates are maintained.

‘Factors such as seasonality, buyer sentiment, perspectives on aspects contributing to future affordability and vendor expectations all contribute to market volatility. As with any market, it takes two or three months for trends to be differentiated from natural market volatility,’ he explained.

‘In particular, it will be interesting to see whether Brisbane’s 2% decline this month is simply natural volatility or if it’s indicative of the city’s struggle to trend toward its 2009 peak,’ he added.

US home prices expected to rise 3% in next 12 months, says latest forecast report

US property prices are expected to rise 3% in the next 12 months but growth will depend on location, according to the latest real estate market report from Zillow.

The Zillow Home Value Index rose to $169,200 in February, up 5.6% year on year and the number of homes listed for sale on Zillow was up 5.5% annually.

However, the firm says that as the spring home buying season heats up, buyers and sellers nationwide can expect very different experiences when it comes to negotiating power. According to the latest Zillow analysis of national buyers' and sellers' markets, sellers in the West will likely have the upper hand in negotiations when selling their home, while buyers in Midwestern and East Coast metros will likely face less competition and have more room for bargaining on prices.

The Bay Area, San Antonio and Los Angeles are the top prospects for sellers and Cleveland, Philadelphia and Tampa the top of the list for buyers, according to Zillow.

In this analysis, a sellers' market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to, or greater than, their last listing price. In buyers' markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.

The real estate data in markets on both coasts are telling markedly different stories, the report says. ‘Relatively strong job markets in the West are helping spur robust demand, which is being met with limited supply, causing rapid home value appreciation and giving sellers an edge. In the East, housing markets are appreciating a bit more slowly, and homes are staying on the market longer, which helps give buyers the upper hand,’ said Zillow chief economist Stan Humphries.

‘In general, buyers in sellers' markets this spring can expect tight inventory, increased competition and a greater sense of urgency. Sellers in buyers' markets may need to be prepared to lower their asking price, or to wait longer for the perfect buyer to come along,’ he explained.

‘As we put the housing recession further in the rear view mirror, the broad based dynamics that applied during those days, when all markets were reacting similarly to nationwide economic conditions, are fading. Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced,’ he added.

He also pointed out that but both monthly and annual US home value appreciation slowed to their lowest paces in months. National home values were almost flat in February from January, and were up 5.6% from February 2013.

The pace of home value growth has slowed in recent months as more inventory of for sale homes has helped meet demand. Nationwide, while inventory remains tight, the number of homes listed for sale on Zillow was up 5.5% annually in February.

For the 12 month period from February 2014 to February 2015, national home values are expected to rise another 3% to approximately $174,285, according to the Zillow Home Value Forecast.

The data also shows that national rents rose in February from January, up 0.2% to $1,310. Year on year, national rents were up 2.8% in January.