December Update
Given the continuing recession, seemingly endless euro crisis and ongoing restrictions on First Time Buyer mortgage lending, the local house market has stood up remarkably well in 2011.
The lower end of the market, whilst still starved of first time buyers, has been sustained by Buy to Let Landlords. The lack of tangible return on deposit accounts allied to the strength of the letting market has ensured a steady flow of investment buyers, although the prices paid have been severely limited.
The number of properties coming onto the market has been lower than in 2010 with the four recognised causes of sale, Death, Divorce, Debt and Dementia, again being the most prominent.
Viewing patterns have been unpredictable and with buyers relying more and more on internet data, many sellers have seen disappointingly low visitors to their property. Conversely, the ratio of offers to viewings has been generally good with house sales being agreed even though there were only a handful of visitors.
Our overall results for 2011 have been extremely positive with sales achieved of over 350 properties, including our first ever £1million sale, representing an increase of 19% on 2010. We are also delighted to have been recognised as the Estate Agent with the highest proportion of sold signs in Chesterfield according to the independent For Sale Sign Analysis Service.
Neil Hunt BSc FRICS
Managing Director
Not All Bad News
The local house market continues to bump along the bottom with the ongoing surfeit of supply ensuring that prices remain low.
With no sign of an end to the well documented shortage of mortgage funding for first time buyers and continuing weakness of the economy, the trend is well and truly established for the rest of the year.
Despite this apparently gloomy picture, sales are being achieved, with owners of well presented, competitively priced homes still able to sell. Patience is the order of the day, however, with the average period to effect a sale being 6 months.
Neil Hunt BSc FRICS
Managing Director
May Update
It was generally expected that the market would improve after the Easter/Royal Wedding/May Day Holidays, but in respect of many properties this has not materialised.
Analysis of the current situation is very difficult as there are often glaring inconsistencies between the volume of internet viewing activity and the number of actual visits to the property.
On the upside, this means that our clients are not being subjected to ‘time wasters’ and that potential buyers are filtering out unsuitable properties before making viewing appointments.
Conversely though, we know that without an actual physical inspection, nobody is going to buy, so all our efforts are geared to achieving this goal, including staff incentives, Sunday opening and cross referencing of active viewers.
The overall economic situation continues to be a problem, particularly mortgage restrictions on first time buyers, fear of redundancy, and a general lack of confidence. Similarly, continued adverse and sensationalist media publicity about falling house prices and negative equity is as unhelpful as ever.
Whilst this seems like a fairly negative prognosis, it is not all doom and gloom. We have registered 136 new applicants on our mailing list in the last three months and agreed 73 sales at an average of 95% of the asking price.
The evidence suggests that buyer behaviour is changing and an actual viewing appointment is often the final act in the decision making process rather than the first as it always has been previously.
Neil Hunt BSc FRICS
Managing Director
September Update
Already this year we have seen conflicting reports, some of price increases and others of falls. There has also been speculation of a 'double dip' recession, with widespread re-possessions.
Our assessment of the current market is that, whilst prices have been fundamentally stable, it is very slow with an average sale time of six months. In addition to the general economic situation, the factors influencing this situation include the following:-
- The number of first time buyers is at an all time low. Large deposit requirements, penal credit scoring and shockingly high interest rates (Bank Rate 0.5% but Mortgage Rate 6.5%!) have all combined to keep young people off the property ladder. The knock on effect of this is that it is very difficult to get chains tied up.
- Fortunately, there are a lot of people investing their money into property, both for their own occupation and as buy to let investments
- Abolition of Home Information Packs has produced a glut of property onto the market
- The availability of sale price information on the internet to prospective buyers has made them very well informed and extremely keen to get value for money with most agreed sales being below the original price.
If the flow of properties onto the market continues to increase and nothing is done to address the mortgage situation, prices will inevitably come under downward pressure.
Neil Hunt BSc FRICS
Managing Director
Multi faceted Market confuses Analysts
The British Love Affair with property ownership ensures that very few days pass without a new media story about the state of the House Market.
It is therefore interesting to note how many of these reports are completely contradictory with some reporting healthy price increases and others saying values have fallen.
The reality is actually far too complicated to be summarised in a sound bite or attention grabbing headline, with different house types, price ranges and locations all performing differently.
Examples of this situation are two bedroomed terraced houses, which have struggled to hold their value and in some areas have fallen further, whereas modern four bedroomed detached estate houses have generally risen in value and sold well.
The factors behind these contrasting fortunes are readily identifiable, first time buyer mortgages are still very difficult so demand for terraced houses has been strangled whereas the lack of any new build supply of family homes in recent years means that those available are at a premium.
So, next time you see a dramatic headline about house prices, take it with a pinch of salt.
Neil Hunt BSc FRICS
Managing Director
Could do better
The first quarter of 2010 has seen the market moving in fits and starts, with periods of strong activity interspersed with inexplicable lulls.
This irregular pattern has been reflected in the level of prices achieved, with some properties selling for between 5% and 10% more than they would have been last year and others actually selling for less.
One significant feature of the market is the continued scarcity of first time buyers, undoubtedly due to the size of depsoits now required by mortgage lenders. Saving at least £10,000 or more probably £15,000 for a young person or couple is extremly difficult, even more so if they're paying rent and taxes as well.
The apparently generous increase in the Stamp Duty threshold to £250,000 in the Budget will have little impact in the North Derbyshire House market where very few First Time Buyers can afford over the previous starting point of £125,000. Giving Tax Relief to parents helping their children to raise a deposit would have been a much better idea.
Looking forward, the looming Election, allied to unchanged mortgage availability will continue to suppress the market, but look out for a post-election mini boom as long as its not a hung Paliament.
Neil Hunt BSc FRICS
Managing Director
Green Shoots Emerging
Whilst the last thing the local house market needed was a prolonged cold snap straight after its Christmas/New Year hibernation, there have been some genuinely encouraging signs of increased activity in 2010.
In spite of the weather, viewing levels have been significantly higher and this has been reflected in both offers and sales agreed.
There has also been an increase in the number of home owners having their property valued with a view to putting it up for sale.
Mortgage availability and lending criteria are still a problem, but the level of underlying demand is definitely increasing with, as yet, no evidence of any election effect.
So although its early days, the green shoots of recovery are certainly appearing and its only to be hoped that they are here to stay this time!
Neil Hunt BSc FRICS
Managing Director
Price Rises Not Happening Here
The continued media coverage of House Price Rises in recent months highlights the danger of using generalised national data, because it does not reflect the reality of the local market.
Despite an undoubted shortage of properties for sale, there is no evidence that this is being reflected in increased prices, with buyers being prepared to wait for a property that meets their budget rather than over commit.
Similarly, Bank and Building Society Mortgage Surveyors are being extremely cautious in their valuations for lending.
The restraining factors on demand such as large deposits, limited mortgage availability and fears over unemployment are still very much in evidence and look like continuing into next year. The reduction of the Stamp Duty threshold back to £125,000 will not help either.
The keys to achieving a successful sale are still price and presentation,so those who are seeking premature recovery of lost value are likely to be faced with a long and frustrating wait. Conversely, those who are well advised and realistic can achieve a sale and,if they are looking to buy as well, put themselves in an excellent position.
Neil Hunt BSc FRICS
Managing Director
