UK market review - number 27, 2011
Bedfordshire, £1.3 million guide
Steady progress along a challenging path
The year to date has been markedly better than many had expected – though expectations, were, it must be said, low. Amid justified talk of growth in the number and confidence of prospective buyers, competitive bidding for special properties and firmer prices, lie a few hard facts. These are that overall activity levels remain comparatively low, that there is little pressure on prices in either direction and that securing finance on attractive terms is not getting any easier. Thus whilst "picture perfect" houses, sensibly priced, are indeed selling well, for everything else our greatest challenge as agents remains getting the marketing right to the point at which we can generate competition amongst buyers who feel that, in most instances, time at least is on their side.
West Sussex, £2.75 million guide
There are, of course, regional variations to this picture. Areas with a more internationally-linked economy are faring better. These include most obviously greater London and pockets of the North West, but also parts of Cambridgeshire and the M4 corridor. New homes, too, are doing well, as house builders (and their customers) at last start to benefit from the much lower development land prices of around 18 months ago. Our Exeter office, for example, which quite recently opened its Land & New Homes department, has enjoyed remarkably strong sales during the year to date, including an impressive number of off-plan sales. This is encouraging: for many months 'post- Lehman Brothers' such transactions all but ceased.
Financial hurdles and economic fears nevertheless continue to hold back prospective buyers and sellers alike. At the time of writing, those falling short of a 25% deposit face interest payments of two or even three times the best rates available. This doesn't affect just first time buyers. Historically, a big part of the mainstream market was those moving from their first home to a larger one. Typically younger families, they would have built up some capital, but not 25% of the house to which they aspire. For most in this position, trading up is not a realistic option.
Cornwall, £1.295 million guide
A little ironically, older people who might normally trade down and release some capital, feel similarly restricted, seeing few investment opportunities which offer both sufficient security and return to tempt them. So this is another relatively inactive group which, like the second time buyers, consists of people who would be both buyer and seller. Under such circumstances, the combination of low activity and equilibrium in prices is perhaps not surprising.
Seasonal and financial factors will, of course, change things. Earlier in the year, many of the more committed buyers were those looking over £1 million, keen to avoid the extra 1% stamp duty tax payable from 4th April (as much, it must be said, out of principle as of a wish to save money). At the time of writing, the prospect of modest interest rate rises is urging some to act whilst they can lock into a lower rate. And spring is bringing its usual boost to overall activity.
Looking ahead, reports from almost all of our 42 offices show a stronger first quarter than either of the previous two and sufficient 'green shoots' to give heart.
We expect to have our work cut out but, set against a background economy of very mixed fortunes, look forward to a market characterised by steady progress, not drama.
Exeter, £1.25 million guide