Is the property market experiencing ‘green shoots’ or is this just wishful thinking?!
If I had a pound for every time someone has asked me this question – well, I’d be a lot better off! I don’t have a crystal ball sadly – but I have noticed some developments, particularly in the last six weeks or so. Here’s my thinking …
It is true to say that the property market is finally beginning to see some movement. Properties are going under offer and exchanges and completions are happening. But, in order to achieve these key targets:
• Purchasers need to ensure upfront that they have secure funds to add to any mortgage of at least 20% of their chosen property’s value. Then, if everything else tallies up and they can afford the mortgage – they should get a written offer to secure their purchase and have the property taken from the market.
• And, vendors need to be realistic about the current market value of their home to attract a buyer in the first instance. Bank and/or building society valuations can still down value if a price is set too high – and this can cause withdrawal which is stressful for all concerned.
In short (and I know this sounds obvious), what you need is a committed purchaser and a willing and committed vendor. If one pushes too far, then you may not get the deal through – so keep communicating and make sure everyone is happy with the agreed price and terms up front.
Additional good news is that there are properties available to purchase at much below their 2007 perceived values – but, on the other hand, there isn’t much choice and this choice is reducing as properties sell. Extremely frustrating for estate agents and potential purchasers alike – especially if you are now very keen to buy a new property and ready to proceed to exchange without a chain and with funds in place. In fact, some agents in the best areas are beginning to have off markets lists (yes, despite the HIP requirements!) that are not openly promoted to everyone; just to their best prospects. Another sign that things are looking up.
Actually, I do believe that, especially at the top end of the market, prices have bottomed in most cases. Especially around London, the South and South East and Home Counties.
Some house prices are stabilising, whilst the very best located, turned out and attractively priced properties may even achieve a higher than market price. This is a combination of correct pricing, more buyers viewing and also a decreasing supply of available properties to choose from.
Properties most likely to sell are still those that are well located, show well and don’t need huge amounts of work doing to them. Property developers or individuals who buy to sell on are still not purchasing as many major refurbs - unless they are real bargains. This is because the property market is unlikely to increase in value significantly in the short term due to the overall lack of cash available and the large amount of debt to clear. Additionally, many who may have thought of selling now are still holding back just in case the market does pick up. And, many may not be moving as their mortgage rates are so good and they’ve got extra cash in their pockets for other things.
So there is some good news around – not everywhere - but areas close to key cities with good communication links. Still be cautious of purchasing some properties (especially high density flats and houses) unless the deal is almost too good to be true and still be cautious of purchasing a ‘bottomless pit’ unless it is your ‘forever house’ and you plan to live there for many years!
As always, do take advice and never hesitate to call me – even if it’s just for an initial chat. I’d always be happy to hear from you.
Have a lovely summer. Remember, to most of us our house is our home and not just an investment ….
Bfn
Leonora
June 2009
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