News & Insights
A good time for sellers to get a better price
The number of transactions in the housing market is at an historic low but slightly counter intuitively, that could mean good news for those homeowners who are prepared to sell their properties.
The mass housing market is holding its breath to see what happens next, but while it does so, an increasingly sizable minority is becoming increasingly active. This is mainly driven by the fact that more first time buyers have been encouraged by recent government incentives to try to get on the housing ladder.
It means there are more buyers than sellers and that means several buyers may be vying for individual properties in a shrunken market. Sellers are becoming wise to this and this may explain recent data showing that asking prices have risen sharply sharper than at any time since the onset of the 2008 banking crisis.
New figures for new listings at Rightmove show that they have seen a four per cent decrease so far this April as compared to last April, even excluding the Easter period. That sounds bad, but the properties that do come up for sale are on average taking ten per cent less time to get sold.
The trickledown effects of the Governments planning to revive the housing market are now undeniable. The news of the Help to Buy scheme where buyers will only have to save up a five per cent deposit, with the Government underwriting a further 15 per cent of the value, means ambitious and solvent young people are now finding the courage to enter the market and put their money down.
They are further encouraged to do so with help from the Bank of Englands Funding for Lending Scheme, which delivered a shot in the arm to home ownership when it was launched at the end of 2012.
Also interesting and encouraging for the market as a whole is the evidence that the gap between the asking price and the price eventually paid is narrowing. Even though, as we have seen, those asking prices are rising.
It appears that the buyers still feel they are getting value for money despite the raised prices. It also means that they have the money and the confidence at last to meet the raised prices.
So the buyers and sellers are beginning to feel that the time to enter the market has come, or is approaching.
Does all this add up to the first green shoots? It is possible. The pool of activity is as yet small, but if more potential sellers see that their more courageous neighbours are attaining good prices, they themselves will be encouraged to put up the For Sale boards themselves.
Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.
