On theBest of Ealing website, Northfields shared some tips for selling your property in 2012. Based on some predictions from property website Rightmove.co.uk, 2012 looks set to be a year of what Rightmove is calling “micro-markets”, meaning that house prices will be dependent on the very specific conditions in your local area.
Because of these micro-market conditions, sellers are advised by Rightmove to depend on the local expertise of a trusted estate agent and to be aware of the current status of the property market in their area in order to get their property sold.
Like sellers, buyers will need to be aware that micro-markets will mean that conditions and prices will vary widely depending on the type of property and area where their house hunt in centred. Buyers may find that they have very little choice of properties, or an over-abundance of choice. Some properties may be listed at bargain prices while others may seem over-priced. For example, a family house in a very sought after school catchment area may fetch a higher asking price and may also get snapped up very quickly, while other properties have to be priced just right to even attract a viewing.
Miles Shipside, CEO if Rightmove explains the current market: “It is clear that in these turbulent times the UK housing market is made up of many fragmented micro-markets that are performing very differently. Those that are involved in buying or selling next year need to understand their local market dynamics to help them deliver the right recipe for success. That will include gauging under- or over-supply of property types, buyer demographics and mortgage profiling, unemployment concerns and exposure to public sector cuts or the likelihood of external investment”.
Housing shortage
One thing buyers may want to keep in mind that currently, the UK is experiencing a real shortage of housing. Fewer new homes are being built, but the population keeps rising.
Of course, the government has put in plans to ease the difficulty and red tape involved in getting planning permission as well as set in motion a plan to insure lenders against loss in order to get them lending more. However, neither of these plans have really been put into effect yet and so it remains to be seen if they will be effective in kick-starting the market.
Added to that, if the Eurozone economy worsens and causes widespread unemployment, we may see more European workers immigrating here to look for work. This may put even more pressure on the dwindling housing supply, especially in London..
So with so much demand and very little supply Righmove is predicting that house prices may not fall. It is estimated that newly listed houses will rise by circa 2%, although Rightmove points out that “this national average will vary in the many local micro-markets”.
Rightmove expects that “the number of properties coming to market will be marginally below the 1.24 million recorded in 2011. This anticipated decline reflects the fall-off in sellers coming to market seen by Rightmove in recent months. It means that new seller numbers will be about a third down on the pre-credit crunch levels in 2007. The shortage of new sellers in some locations, and improving investor yields on rental properties, will help underpin prices and stave off a price collapse except in exceptionally adverse market conditions.”
This advice was quite different from some expert opinions, which felt that prices may fall in 2012 and it might therefore be advisable for buyers to wait to see if prices dropped. The question is, what if you wait and prices rise? Or what if prices do drop, but because of the reduced liquidity in the economic market (for example, due to the possible collapse of the Eurozone), you are unable to secure a mortgage?
First Time Buyer Numbers Down
Anyone who follows the news will know about the lack of mortgage financing that is available. Large deposits are still being required and lenders continue to lend to only the most credit worthy borrowers. Sadly, this does leave most first time buyers locked out of the market, unless their circumstances have allowed them to amass a large enough deposit.
It is expected that this method of financing will continue into 2012, meaning that there will be few first time buyers looking for property. A recent Rightmove survey found that of those who intend to buy over the next 12 months just 23% will be purchasing for the first time. In a normal and bustling market, first time buyers would make up 40% of the house hunting group.
With such a low number of first time buyers actively buying, those sellers who need to sell their starter homes in order to trade up, will need to price their properties attractively to make their next move on the property ladder. This means that first time buyers or buy-to-investors who are able to secure a mortgage will be in an advantageous position in the market.
Buy-to-let landlords will have the perfect conditions, with investment properties widely available for sale and rental properties hotly in demand and rents rising.
The Tide Could Turn
Rightmove’s admits that their predictions could be thrown off course if the Eurozone financial crisis deepens. Should the worst happen in the EU, then mortgage conditions could become even more difficult. If that were to happen, the number of sales would likely drop slightly on the levels seen in 2011.
Rightmove’s Shipside wound up his 2012 predictions by saying that: “We have had a few years of testing the resilience of the bottom of the market, and we seem to have found a base level that represents an uneasy equilibrium between repressed buyer demand and affordability, and what sellers are willing or able to accept.
The questions is, if you need to move for work, to accommodate a growing family, to downsize or whatever your need might be, why wait to see if prices drop? Why chance mortgage financing becoming even more difficult to get?
Use the last two weeks of 2011 to view properties and put in an offer. Northfields’s Managing Director, Richard Palfreeman has always bought his properties in November and December as sellers who continue to market their property at this time of year are motivated to sell and are more likely to take a competitive offer.
Take a look at the properties Northfields currently has available for sale by clicking the link or better yet, register your details online so that you can begin to schedule viewings right now. If this is the time when property experts buy, what are you waiting for?