Market Update Easter 2013

With the Budget behind us, we are now in, what is regarded as, the strongest season traditionally for the property market and levels of enquiries and transactions continue apace in both sales and lettings.

Despite the continuing challenges of the national economy, the market shows no signs of wavering and prices remain steady and strong.

The Budget announcement from George Osborne saw the announcement of two multi-billion-pound schemes to try and kick-start the housing market which, nationally, is operating at volumes well down on historic averages

In, what must be seen as, a political move with an eye fixed firmly on the 2015 general election, George Osborne announced that the Government would offer five-year interest-free loans worth up to 20 per cent of the value of new-build homes costing less than £600,000.

Of course, new home developers need to be confident that the properties they build are going to sell and this scheme together with forthcoming relaxations in planning rules are likely to stimulate a greater number of new home starts.

From January 2014, another scheme will see taxpayers underwrite mortgages to those with small deposits, including more than a million people trapped with so-called “zombie” loans, where the fall in the value of their homes has left them unable to move.

The Government will offer £12 billion of guarantees covering mortgages worth more than £120 billion. They are intended to help 644,000 people over the next three years.

Of course, it remains to be seen whether these schemes stimulate an increase in activity but my immediate thoughts are that they are likely to improve the opportunities for many to be able to buy, particularly first time buyers and second steppers.

We are already seeing that with growing numbers of attractively priced mortgage schemes available, an increasing number of buyers who have been holding back from making a move, are now committing to buying.

Recent reports from both Rightmove and the Building Societies Association showed growing confidence in the property market and the highest levels of commitment towards buying for several years.

With the weather looking set to get brighter and warmer (hopefully!), now is therefore the perfect time to get a property on the market and show it off to its best as many buyers look to secure a move ahead of summer and new school intakes in September.

The lettings market also continues to be strong and many landlords are taking advantage of attractive interest rates to invest further in the market. Recent reports indicate that the average landlord in the UK now has twelve properties in their portfolio.

More and more people are seeing the private rental sector as a market of choice as it offers greater flexibility of tenure and the average length of a tenancy has increased to over two years. Of course, there are many tenants and some landlords who have entered this market through necessity and who will look to buy as soon as they feel able to do so.

Across the UK the private rental sector now accounts for some 17.4% of households with some 67% being owner occupied and the remainder being socially provided.

With new home building at low levels (less than 100,000 UK starts in 2012) the balance between supply and demand looks set to ensure that values in both the sales and lettings sectors remains strong.

With the market generally buoyant we are starting to see some shortfalls in the levels of instructions coming to the market both for sale and to let. Some people are still slightly reticent about placing their property on the market before securing an onward move.

In my opinion this is the wrong tactic as placing your property on the market ahead of finding an alternative means that you have greater flexibility and control over the process. Quite simply there is nothing to lose and everything to gain as you have removed much of the pressure and given yourself more opportunity by being seen as more committed and serious. This often results in an excellent prices being obtained on properties being disposed of and attractive prices being negotiated on the onward move due to being in a good position to proceed.

As always the team and myself look forward to being of assistance to you.

Peter Lawrence
Lawrence Rand