Welcome to my property market update for February 2013!
The Press hasn’t been too intent on destroying public confidence in the housing market this month, which is good to see. Indeed, that’s been a few months where it appears that Scottish Independence and the trams in Edinburgh have bumped more general property market news off the front pages of most of the papers. And long may that continue: good news that is, I’m not going to enter into the Independence debate!
So, with that in mind, what HAS been said this month about your local property market and what have I been seeing happening, from my own position seeing and hearing the levels of activity in a busy solicitor/estate agency office? Read on!
Press Coverage of the Property Market in February
‘Signs of Life’ in the Property Market – http://www.bbc.co.uk/news/business-21349297 – The Halifax reported that UK property prices had risen 1.3% year-on-year in January, compared to January of 2012. Positive signs but we don’t get unadulterated, positive economic or property-related news these days and they did point out that prices were still 0.2% lower than in December 2012.
‘Mortgage Approvals Hit By Cold Snap’ – http://www.bbc.co.uk/news/business-21572869 – Mortgage approvals across the UK were down by 14% in January 2013 compared with the same month last year. This was blamed by the British Bankers’ Association as being because of the cold weather across the UK. That said, if bad weather prevented people from taking-out mortgages, I don’t think lenders would bother setting up shop in Scotland. But I’m sure there’s some truth to the theory…
‘Funding For Lending Scheme Boosting Market’ – http://www.bbc.co.uk/news/business-21585450 – According to one of the UK’s leading house builders, the government’s Funding for Lending Scheme (putting up to £60 billion of funds in the hands of lenders in order that it is lent back to the public and helps to boost lending levels) is really working. House builders have seen jumps in profits which, whilst of course ‘bullly for them’, is a good sign that people are actually moving and buying houses. This, for what it’s worth, is certainly our experience too: there is no doubt that mortgage rates have fallen, though criteria for lending remain tight so the lenders are clearly still quite risk-averse.
My View of What’s Happening in the Property Market
There’s no doubt that we’re starting to see the onset of Spring, with the number of potential property sellers enquiring about putting their home on the market starting to rise significantly. That said, it was an incredibly busy start to the year, from January onwards, so it does look like people are starting to do their research a little earlier this year with a view to still waiting to get on the market in the Spring time.
The net effect of people holding-off till Spring has been a shortage of new properties coming to the market in February compared with what we predict will happen in March and April and also when compared with the large rise in the number of buyers who have been registering on our database to be informed about new properties coming to the market.
The increase in buyers actively looking versus the number of properties coming to the market has been GREAT news for property sellers whose properties have perhaps not been flying off the shelves quite as fast as everyone would have hoped. We have certainly seen some of our older stock selling, and without significant price reductions, and we are seeing our purchasing clients buying properties that have been on the market for quite some time too.
As a result though, some of our purchasing clients are beyond frustrated with the lack of choice available to them as the number of properties on the market dwindles versus the level of interest that actually exists at this time of year because of sellers waiting for the perceived ideal Spring selling market.
The net result of the supply and demand is that we are seeing more Closing Dates, with more and more bidders bidding at the Closing Date, and buyers increasingly frustrated at having missed-out yet again on a property that they didn’t expect to be as popular as it was.
So what’s happening with property prices? Are they rising or falling? The reality, as boring as it is I’m afraid, is that property prices seem to be staying stable. We ARE, however, seeing some bids that are well, well over the asking price and the Home Report valuation, particularly at Closing Dates, but on top of the obvious factor of people over-bidding because they’re afraid to lose-out to someone else at the Closing Date, I actually believe that this is as much to do with surveyors being overly cautious with their Home Report valuations following some severe dressing-downs that have been handed out by lenders to surveyors in recent times, particularly for historic valuations that have turned-out perhaps to have been a little bit optimistic.
And what’s my prediction for March? Well, I expect things to really pick-up in terms of properties coming to the market. This will be lovely for buyers who have been sitting around waiting for these for a few months now and who will welcome some more variety. Does this mean, however, that the number of purchases will go through the roof? Probably not. Buyers don’t only buy in Spring and, in the current climate, they are looking all year round. So I would expect that the number of sales will pick up because of the amount of choice but that prices will remain pretty level because supply will start to meet the demand in a way it certainly hasn’t in the last couple of months.