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| English: Bacton Hall Adjacent to Church Farm, presently advertised as for sale on the property market. (Photo credit: Wikipedia) |
Property Market Trends and its Impact
According to Halifax, house prices were up very slightly in
March. Compared with February they rose by 0.1%. They are still down by 3.3% compared
with March 2010 though.
The number of people buying homes has drastically slowed,
and this is something that is worrying many in the property market. Some have
suggested this could be because house prices are not coming down enough. People
would rather stay put for now than reduce the asking price of their homes,
meaning people aren’t being encouraged to buy the way they would if prices had
fallen more significantly. With many worse off than they were a few years ago
it means that despite lower prices, people are actually less likely to buy.
With it being harder to get a mortgage than it was and with higher deposits
required, it makes it even more difficult. All these factors mean that to some
extent the property market is in flux.
The question is what would need to happen for the market to
become more active? As already touched upon, prices falling further would liven
up the market, although property owners may not come out of it well. This does
seem unlikely though, or at least unlikely there will be any significant drop.
If prices were low enough it would encourage people to take the opportunities
while they can, and make it affordable to a wider group of people. If this
doesn’t happen, it seems likely that we will have to wait until the overall
economic situation improves across the country.
The government has come up with a new scheme whereby first
time buyers can borrow up to 20% of their deposit for a home, therefore only
having to pay 5% themselves. It is hoped that this could have a similar impact
that the scrappage scheme had for cars had. This is good news for many first time
buyers looking to get on the housing ladder and for property developers, but
not so good news for the property market in general. The scheme only applies to
new builds so for those looking to sell their existing home it will make no
difference, or could even have a negative impact.
Although the above news affects much of the country, it
doesn’t mean the property market is dead everywhere. There are always people
with money and there are always sought after areas. In particular there are
areas of London where the property market is still relatively active, with
areas such as Kensington and Fulham, and suburbs such as Wimbledon and
Richmond, not suffering the way other areas are.
Another influence that the current state of the property
market is having is the lettings market. With prices of homes lower than at
their high, there is the opportunity for some to buy-to-let. And with many
unable to get onto the housing ladder it means that rented homes are in high
demand. With prices bound to rise in the long-term, there are those who will be
able to profit from such a market.
Andrew Marshall (c)
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