26
Jun
Residential Property Market Update For Sellers - Half Year 2008
Nick Churton of Mayfair Office offers
summary of the first half of 2008 in the property market.
"The UK is now experiencing the full impact
of the global credit crunch with the twin of sharply rising fuel,
energy and food prices. These have had such a negative effect
that property transactions in some areas are down by fifty per cent
year on year, and latest figures show that mortgage offers are down
by fifty-six per cent.
Many in the
residential property industry believe that this is the hardest
market since 1973 when the UK was going through the secondary
banking crisis - the result of a lethal mix of rising inflation,
rising oil prices, strict credit limits and companies running
desperately short of cash. The only difference today is that we
don’t have a pay and price freeze – yet!
There remains a risk that market conditions
could develop into a full-blown crisis. There is no doubt
that now is the right time to review marketing and take any
necessary steps to stimulate a sale. It is natural to feel
that adverse market conditions don’t or won’t affect
the particular area we live in, and certainly won’t affect
the property we are selling. Sadly they do. Everyone
selling property in the UK is in the same boat. It is those
sellers who recognise the prevailing conditions now who will
benefit in the coming months. Those who don’t
appreciate the situation and those who are determined to hold out
for a wished-for rather than an actual market price will, every day
that passes, see the value of their property erode.
Price is the key. There are buyers
but they now have far more choice and are under much less pressure
to buy. They are taking their time before viewing and certainly
before making offers. They are making low offers and are not
even viewing any property that, in their view, is overpriced.
The seller who thinks they will try for a high price because they
are prepared to come down is seriously misjudging this
market. They simply will have no viewers, and without viewers
there will be no buyer.
First-time buyers are struggling to find
affordable property and are further hampered by lenders who have
become reluctant to lend. Transaction times are getting
longer and this in turn is leading to the unsavoury practice of
gazundering, where a buyer will reduce the offer they have agreed
just before exchange of contracts. This can be a cynical ploy
but equally it may come from a genuine concern about falling
prices. Speeding a ready, willing and able buyer to a quick
exchange is essential to avoid falling into the hands of
opportunists or those who may get cold feet.
But for many
buyers with mortgage funds in place the opportunities are
exceptional. Now is the perfect time to find a new property
as there is so much choice.
With more
property coming onto the market it is important to recognise that
this creates greater competition and it is keenly priced properties
that will sell quickly. Property priced optimistically is
heading for a longer spell on the market and will ultimately sell
at a lower figure while this trough continues.
Despite the bad
news stories in the press and the underlying uncertainty in the
economy it should be remembered that for those with foresight there
are opportunities and benefits in all markets and this one is no
exception."
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