News Dominated by Slow-downs, Slumps and Pessimism
If you are unfortunate-enough to subscribe to property news 'feeds' as I do, your Inbox will have been filled-up throughout May by news of slumps, drops and a healthy dose of gloom.
The BBC website reported, as did many other news outlets, that property sale activity was down significantly in April when compared with March 2012, thoughout the UK. The full story is here: http://www.bbc.co.uk/news/business-18161730.
However, on closer inspection, this was on the back of relatively huge numbers of transactions in March as people rushed to get their purchases through before the end of the Stamp Duty exemption for First Time Buyers of properties up to £250,000. This obviously created a bit of an artificial deadline (and a potential saving of up to £2500 for those buyers). So naturally you'd imagine that the first week of April might have been a bit quiet on the property transaction front. However, when you combine the figures for March and April then the figures compare very favourably with the same period last year.
Property Prices Have Fallen: No Cause for Panic Though
The news was also full of stories about a decline in property prices compared with last year. The BBC story above covered this too. However, let's keep in mind that we're talking 0.4% lower than the same month last year. Of course, these are again UK figures. But unless you were expecting significant property value growth, I wouldn't be too troubled by this. And if you were expecting rampant property price growth, I think you've been reading very different publications to the ones that I've been reading for the past year.
Malcolm Cannon, the CEO of Edinburgh property marketing group ESPC, summed it up nicely in an article in Informed Edinburgh earlier this month: property prices are still declining slowly, but that's not necessarily a bad thing. I couldn't really say it any better than him so, for the full article, have a wee look here: http://www.informededinburgh.co.uk/business/day-in-the-life-of-malcolm-cannon-ceo-at-espc/. It's an interesting article regardless of this particular question and reveals, amongst other things, Malcolm's favourite drink so, if you bump into him in a bar, you'll know what to buy him. In the absence of such a profile existing for me, mine's a nice, cold Kiwi sauvignon blanc, by the way...
What's Been Happening in the Property Market from Our Point of View?
May's been a funny month, truth be told. After a blistering April in terms of the number of new properties coming to the market, May started at a snail's pace. We could only assume that it was due to the appalling weather at the beginning of the month: nobody really fancies doing ANYTHING when it's raining torrentially, non-stop for several days on end. However, after that inauspicious start the month has picked-up significantly and even the great weather hasn't deterred people from putting-off putting their property on the market. Result: steam coming off the fingers and out of the ears in everyone in the office in the past week and a half. It's been a busy wee patch indeed.
Sales figures have been very healthy too though probably not quite as great as April: it seems that April just got everyone in the mood for putting their property on the market and for buying.
In terms of property purchases however, our MOV8 Conveyancing team has been absolutely flat-out. The number of people noting interest in properties in particular has been unbelievable. That of course indicates a large interest in buying without necessarily translating into property purchases. But the number of successful offers made by the team leads us to believe, in the little microcosm of the property market that our office represents, that activity, certainly in East Central Scotland, remains very healthy. Of course, we take nothing for granted but, in spite of the negative Press that I've talked about above, we really aren't seeing that sort of pessimism being translated into the local marketplace.
And property prices? Absolutely robust from what we can see. The properties that have been selling have mainly been selling for close to Home Report value and, in a few instances, for significantly higher than Home Report value. It seems that as long as sellers are realistic about property prices, without being unduly pessimistic, and their property is a good example of that particular type of property then the property will sell. The death knell for getting a property sold however sounds when the property is a little bit over-priced or is a little bit 'tired' and requires a bit too much work for the average property buyer: buyers at the moment can afford to be quite selective and will usually plump for the one that doesn't require too much cosmetic upgrading, unless of course that cosmetic upgrading is factored-in to the asking price.
What's the Best Advice for Property Buyers and Sellers to Achieve Success in the Property Market at the Moment?
What's the conclusion of all this? In line with the upcoming Jubilee spirit, the answer really seems to be, 'Keep calm and carry on.' March and April property market activity, when combined, is healthy and prices remain relatively stable.
Advice is simple if you want to move house: be realistic with your selling price, make sure your property is as attractive as possible to your target market and then remember that, particularly if you are buying, the same factors will affect the properties that you are thinking of buying. Good advice on the property sale side will help you take care of pricing and presentation.
If you are purchasing, the best advice is to remember that it is a buyers market and that there might be quite a bit of wriggle-room around the asking price: the Home Report valuation might be a little bit out-of-date or the property might be in an area where there is quite a bit of competition for the few buyers who are out there for that property. Good advice on the purchase negotiation side will help you to get the best possible price when you are buying. If you are thinking of selling or buying, just give us a shout and one of our property purchase or sale experts will talk you through it.
I look forward to speaking with you next month and hope that you have a lovely month of June: long may the sunshine continue!