Chesterton Humberts’ latest monthly research reports that activity from buyers is increasing as vendors continue to adjust their price expectations downwards, as highlighted by the latest Rightmove figures.
As Rightmove reports that new sellers have reduced prices by an average of 2.4% in response to difficult market conditions, Zoopla, another leading property portal, enjoyed a 45% uplift in visitors during the first three weeks of August. This suggests that the gap between buyers’ and sellers’ expectations is closing and, together with other market factors including record low interest rates and pent-up demand, potential buyers are being tempted back to the market.
Nick Barnes head of research at Chesteron humberts comments: “The reported reduction in asking prices is obviously attracting buyers that have been waiting in the wings for the right opportunity. The banks too, are giving buyers another reason to take the plunge by offering some very low fixed rate mortgages.”
“Longer term however, we need the Government to create favourable conditions to stimulate growth in the economy, which will give households the necessary confidence to commit to purchase decisions.”
Chesterton Humberts believes that there is considerable pent-up demand in the market, partly caused by a summer of distractions and partly by the fact that many potential buyers have been forced into rentals whilst waiting for the right opportunity to become a homeowner. This is backed up by the latest English Housing Survey which announced that 59% of renters aspire to home ownership.
Furthermore, purchasers have taken advantage of low interest rates as evidenced by HSBC who announced a record low five-year fixed-rate of 2.99% before subsequently withdrawing it after just one month, having sold all of the funds allocated to the deal. This has triggered a mini lending war and at least two other lenders continue to offer mortgages at a similar level.
Robert Bartlett, CEO, comments: “Despite a summer that has generally been great for morale but not so great for business, the autumn period should be a busy one for estate agents. Although buyers may be tempted to feel like they have the upper hand, low interest rates will not last forever and once market conditions start to improve again, vendors will expect higher asking prices. Those wishing to move before Christmas should start acting now before festive distractions come into play in November.”
Other key observations in Chesterton Humberts’ CHROME include:
- Transaction numbers were up by 10.1% in the first seven months of 2012, 40% of which were cash deals.
- The Montague Review has suggested measures to encourage financial institutions to develop purpose-built modern rented accommodation in areas of most need, which would be managed to a consistently high standard.
- If the Government implements the Montague recommendations and the institutions commit wholeheartedly to the sector, it could bring about one of the most radical changes in the UK housing market in recent times.
- RICS Lettings Market Survey reports that average rents at the national level increased by 4.3% over the year ending in July.
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For more information or to arrange an interview with Nick Barnes, Head of Residential Research at Chesterton Humberts, please contact Lucy Tinkler; Tel: 020 3040 8362 or Email: lucy.tinkler@chestertonhumberts.com
