There is no let-up in the Credit Crunch, many economic indicators remain pretty dire, the cuts are coming and European banking woes will continue to forced into the open. But properties will change hands, despite the odds.

Markets are about people, and people have to move house – there are now hundreds of thousands of people who might have expected to have moved over the last 3 or 4 years, who haven’t.

Many will continue to sit on their hands and do nothing. Interest rates remain low, people can afford to do nothing. That means a great many houses potentially for sale, but not on the market, so there are unlikely to be as many properties openly available for sale as people expected.

There will also be too many who will put their houses on the market, only prepared to sell for the price that they think is right – eg somewhat overvalued.

The clever ones will aggreesively market their houses with good agents at the right price, a keen, competitive, fair and reasonable price. And, at the same time, will aggressively get out and into the market to find and secure the property they want to move into.

On the assumption that most people have to buy AND sell a property, it’s a great time to be moving. The market is stable, very stable. At the moment.

It’s an old excuse – the summer holidays – like the Budget, like the Election, like the Ash Cloud – always an excuse.

But something has got to give.  There are more vendors and potential vendors entering the gates to sell, but few buyers with real apptetite to buy.  Part of the problem is expectation, of course – on the sellers side that they will get 2009/2010 prices and buyers thinking prices are going to come off their highs over winter 2009/2010.  Sellers are wrong and buyers are right – house prices have come down and are coming down. 

It’s the ‘coming down’ part that also delays buyers, who decide that they will only transact when the market has reached the very bottom.  The trouble is that most wait too long and enter the market as it hits or reaches the bottom, and then they have to chase it upwards again.  The accepted rule, and City wisdom that you should chase and buy into the market as it goes down remains the same for property as it does for stocks and shares.

Many potential buyers are also sellers – but see themselves as sellers first and foremost.  They want to get the best possible price for their property, and not until they have achieved that, will they start looking.  So nobody moves – because everybody has got to sell, before they buy.  Is this the right approach in a rapidly-moving market, particularly when many are looking to move from one property to another? 

It makes much more sense for sellers to become active buyers – they are engaged with the market and are looking on an on-going  basis on what’s selling, why, for how much.  Not only can they be realistic about what they can buy, but they can also deal on the property they are looking to sell.

Our advice to buyers and sellers remains the same, get your house in order and ready for market by talking to your selling agent, get your money sorted - but , above all, once you have done all that, don’t forget to actively enter the market as a buyer.  You want to move, don’t you?

Regarding the property market, Mr. Osborne did not have a lot to say.  It looks as if the loopholes that have been used by wealthier buyers to avoid Stamp Duty are to be reviewed.

However the best thing that The Budget has delivered, is the fact that it has been delivered.  Since the Election, there have been thousands of buyers and sellers of property who have been sitting on their hands and saying, ‘I am going to wait to see what the Budget will bring.’  I am not sure quite what people were expecting, but it was uncertain times and there could have been major specific proposals aimed at the housing market, particularly at the top end.

But that hasn’t happened.

There are really no more excuses, and we hope to see a housing market that will grow in confidence and transaction levels, if not in price appreciation, as properties are released onto the market and the 1.5 million who would have been expected to move over the last 2 years become more active.

We expect prices to be stable.  ‘Caveat vendor’ is our motto – seller beware – and we will be negotiating hard for our clients.

The market always suffers from reduced activity in times of uncertainty, so there will no doubt be would-be sellers delaying (again) the moment they put their house on the market; and would-be buyers who continue to hold out. But overall, activity is likely to increase on pre-election levels over the next quarter.

While we still have to wait and see which property related policies get the green light, a coalition government has the advantage of ruling out the introduction of dramatic policies. It was a good time to sell and buy before the election, and it remains so. Prices are unlikely to increase in the second half of the year, so there’s very little reason to wait to sell. If anything, as supply increases, we expect to see recent rises correcting themselves. So there’s a level playing field, and no panic or spin to get caught up in.

Low interest rates continue to encourage property transactions, and a weak pound is encouraging overseas buyers, although Euro-holders are less evident. Lack of supply continues to be the main limiting factor to a robust market, but we predict that the situation will start to ease slowly. Vendors should take advice on value, and not expect inflated prices – stories about competitive bidding and gazumping are restricted to a tiny minority of properties that are limited in supply and perfect in every respect.

However, there are some very wide discrepancies in the values that are being placed on property. Some is priced correctly and some is heavily over-priced. You want to be sure of the correct position, before proceeding to negotiations.

Purchasers should take advantage of the relative slowness of the property market to make considered decisions, comparing properties and prices, and to keep an eye on new properties coming onto the market. While there’s an undeniable shortage of property available, it’s an ever changing picture, and an extremely complex environment – but still one that should provide buyers with opportunities.

The Chancellor has applied what amounts to an irritant to the top end of the property market. One per cent increase in stamp duty is unlikely to have a significant effect on decisions made by buyers in the £1m+ category, but it may be reflected in prices achieved. Certainly, we will be advising buyers over £1m to bid another 1% less! However, it may have a more substantial impact on the land and development sector where margins are crucial and 1% can make a significant difference.

For cash-strapped first time buyers who are able to raise a deposit, the two year stamp duty holiday will be a welcome initiative. Certainly the raising of the threshold and temporary holiday applied in the past proved a helpful boost to the stagnant bottom end of the market, and we would expect to see an easing of the sector as a result. There is also likely to be a domino effect on the lower middle market which is being restricted by lack of activity at the bottom.

 About turn on the cards?

After a slow start to the year, we are now beginning to see a significant improvement in the amount of property coming onto the market. And in many areas the volume of new property is dramatic. Vendors encouraged by reports of buying activity, and in some cases competitive bidding, are jumping in. But just as estate agents think they’ve got it all wrapped up, with enough property to sell, and plenty of buyers waiting for something to buy, the buyer levels are dwindling. 

Why? Fear is the underlying factor. There’s a more positive mood surrounding the property market, but there’s a great deal of uncertainty surrounding the economy generally with a General Election looming. Will our finances be squeezed harder than they are now? What’s going to happen to mortgages? And jobs? And salaries? Will the Stock Market plummet for a second time? And will house prices drop again?

But for anyone with a real need or desire to buy, we could well be entering the best buying opportunity for a while. Increased quantities of stock will provide plenty of choice, and will prevent prices climbing. Lack of competition will mean buyers can operate at a sensible pace without being pressured to make instant decisions.

Our advice to purchasers would be to make sure that their finances are in order at an early stage. Find out how much you can borrow, and don’t push yourself too far.

Work on the basis that it’s a buyers’ market and you get to call the shots. There’s no guarantee that new property coming to the market is correctly priced. The vendor may be delusional, basing the value on a mythical uplift in the market; or the estate agent may have over-valued in order to gain the instruction. So proceed with caution and do plenty of research to give you a clear idea of what the market value should be.

Don’t feel you can’t pursue two houses (or more) at the same time. Be open with the agent and the vendor, but there’s nothing to stop you being live on more than one house.

Whatever you buy, negotiate as hard as you can. Generally speaking, prices are unlikely to rise for some time to come. Don’t be fooled into thinking we are in a rising market.

The third and fourth quarters of 2009 and first quarter (to date) of 2010 have seen some considerable recovery in house prices. Market supply is low, borrowing is cheap (if you can get it) and the returns from other investments are poor. The amount of house purchases made without mortgages certainly points to investor interest.

2010 looks set to be a year of opposing forces that could make for considerable uncertainty in the housing market. Certainly a quick recovery to 2007 values seems unlikely.

Exerting upward pressure on prices will be the following key factors:

• Equity buyers will continue to chase limited genuinely good stock.
• Lending remains relatively cheap and it seems likely that the MPC will attempt to keep base rates low throughout 2010. The still faltering economy will prove stronger drivers than inflation fears.
• Even with the recent price rises, the market is down considerably from its peak presenting buying opportunities.
• Severely diminished output of new build housing means housing supply will take many years to recover to government targets.
• Overseas investors are cashing in on the strength of their currencies relative to the £. Some are now also seeking better value away from Central London and the South East.
• There is a belief that the worst of the market fall is behind us.
• Popular locations and sought after properties remain in demand.

So, there are certainly continuing factors that could put upward pressure on house prices factors throughout 2010. This, however, is not the whole story. There are a number of factors which point to the recent price rises being a temporary (at least in part) bounce on the path to a much more subdued 2010 and slow recovery thereafter. These are:

·         Lending, while cheap, is still difficult to access for many potential house buyers. The number of mortgage products remains relatively low.

·         FSA review likely to crack down heavily on interest only loans.

·         The recent price rises have been driven by activity at the upper end of the market and in an environment of very low volume.

·         The economic climate remains fundamentally poor and confidence is low among much of the population.

·         Further job cuts in both public and private sector are a distinct possibility during 2010.

·         There remains a large overhang of unsold stock in much of the market. A re-pricing of this will be required if sales are to be secured.

·         Recent price rises could see a flood of properties hitting the market in 2010 as “accidental landlords” seize the opportunity to sell.

·         Return of stamp duty from £125k will hit first time buyers.

·         Election years always bring uncertainty and 2010 certainly does.

Taking these positive and negative factors into consideration, what lies in store for residential property for the rest of 2010?

Some, if not most, of the recent prices rises are a temporary bounce albeit a perfectly rational reaction to a number of the positive factors previously discussed occurring at the right time for purchasers. These gains will be largely wiped out going into 2010 with prices bumping along at late 2008, early 2009 levels for much of 2010. Properties bought at the right price now will certainly represent a good medium to long-term call and as always there will be exceptional properties and market sectors which will continue to perform despite the economic situation. Increased supply, re-pricing of stock and a fragile economic situation are likely to lead to a very flat 2010.

This picture is certainly not all “doom and gloom” as 2010 will prove to be a good buying opportunity in perhaps the best “buyers market” for 10-15 years.

The main question concerns supply or lack of it.  Will there or won’t there be good new property coming to the market this Spring?  It depends where you are – some agents are reporting plenty of valuations and lots of instructions.  But then – they always have!

The third and fourth quarters of 2009 has seen some considerable recovery in house prices. Market supply is low, borrowing is cheap (if you can get it) and the returns from other investments are poor. The amount of house purchases made without mortgages certainly points to investor interest.

2010 looks set to be a year of opposing forces that could make for considerable uncertainty in the housing market. Certainly a quick recovery to 2007 values seems unlikely.

Exerting upward pressure on prices will be the following key factors:

• Equity buyers will continue to chase limited genuinely good stock.
• Lending remains relatively cheap and it seems likely that the MPC will attempt to keep base rates low throughout 2010. The still faltering economy will prove stronger drivers than inflation fears.
• Even with the recent price rises, the market is down considerably from its peak presenting buying opportunities.
• Severely diminished output of new build housing means housing supply will take many years to recover to government targets.
• Overseas investors are cashing in on the strength of their currencies relative to the £. Some are now also seeking better value away from Central London and the South East.
• There is a belief that the worst of the market fall is behind us.
• Popular locations and sought after properties remain in demand.

So, there are certainly continuing factors that could put upward pressure on house prices factors into 2010. This, however, is not the whole story. There are a number of factors which point to the recent price rises being a temporary (at least in part) bounce on the path to a much more subdued 2010 and slow recovery thereafter. These are:

·         Lending, while cheap, is still difficult to access for many potential house buyers. The number of mortgage products remains relatively low.

·         FSA review likely to crack down heavily on interest only loans.

·         The recent price rises have been driven by activity at the upper end of the market and in an environment of very low volume.

·         The economic climate remains fundamentally poor and confidence is low among much of the population.

·         Further job cuts in both public and private sector are a distinct possibility during 2010.

·         There remains a large overhang of unsold stock in much of the market. A re-pricing of this will be required if sales are to be secured.

·         Recent price rises could see a flood of properties hitting the market in 2010 as “accidental landlords” seize the opportunity to sell.

·         Return of stamp duty from £125k will hit first time buyers.

·         Election years always bring uncertainty and 2010 certainly do so.

Taking these positive and negative factors into consideration, what lies in store for residential property in 2010?

Some, if not most, of the recent prices rises are a temporary bounce albeit a perfectly rational reaction to a number of the positive factors previously discussed occurring at the right time for purchasers. These gains will be largely wiped out going into 2010 with prices bumping along at late 2008, early 2009 levels for much of 2010. Properties bought at the right price now will certainly represent a good medium to long-term call and as always there will be exceptional properties and market sectors which will continue to perform despite the economic situation. Increased supply, re-pricing of stock and a fragile economic situation are likely to lead to a very flat 2010.

This picture is certainly not all “doom and gloom” as 2010 will prove to be a good buying opportunity in perhaps the best “buyers market” for 10-15 years.

I am afraid that too few have listened.  There was been a wide-spread belief that the market had collapsed and vendors would only be offered fire-sale prices.  That was true over the winter of 2008-2009, but not for the rest of this year.  There has been reasonable trade – it is reckoned that about 60-70% of the average number of house sales will go through over 2009 - not bad when you consider that the market was operating at about 10% of usual volumes in the first quarter.

But way too many vendors and buyers have sat on their hands and done nothing – and both are missing opportunities.  The market is so short of properties in many parts that prices are actually rising; this is absurd and a bubble that will soften.  But it will only deflate to the post-Peak levels that are clearly reasonable and measured.

You can’t buy, if you haven’t sold - and there are great deals out here.  So, if you are looking to make the most of a stable market and move on with your life, call us or call your estate agent and get your house on the market.  (And if your agent advises you to wait until the Spring, make sure that there is a very, very good reason).

To catch breath after a fairly frantic late Spring market is no bad thing, and a further settling of the market allows further confusion to dissipate because, basically, things are much the same as they were a quarter or so ago.  The market has been massively corrected.  Mortgages are hard for some to get hold of (but not others).  The economic outlook is uncertain, and job security poor.  But for factors to remain unchanged for several months is a rare treat after the heady turbulence over 2007 and 2008.

And our advice remains the same.  There is both demand and a market.  If you want to sell, talk to your agent.  If you are thinking of buying, speak to us.

People should not be fearful a market which is relatively stable, and looks likely to remain that way for some time.

There have been some good deals going through over the traditional Spring market – but it started late and transaction levels still remain low.

The lack of stock has caught many vendors, buyers, potential vendors, potential buyers and agents by surprise.

The last window to grab an absolute bargain was last winter 2008/2009.  Many potential sellers saw the carnage and and have held off coming to the market over Spring 2009, in the belief that they would not sell as there was no market and/or that they would only be offererd fire-sale prices.  In hindsight, they have been wrong on both counts.  There have been both a market and an acceptable level of adjusted price achieved.

The question is: what now?

There will be more stock coming through over the Autumn but supply will remain thin and patchy.  With interest rates remaining low and 90% of homeowners in positive equity, the pressure to come to the market will be driven by the brave, Debt, poor employment prospects and the underlying cycle of changing property requiremnts.  I think that many may miss the opportunity to trade into a market of some stability.

My advice to those looking to move is get your house on the market, get your finances in order and get ready.

Winter will be on us before you know it.