Nursing those Green Shoots

There are many estate agents who are frankly astounded at the level of activity that we have seen so far this January.  And so are we – not completely, as we know there is strong latent demand hovering around the market.

But our message to buyers is don’t be bounced by over-enthusiastic sales talk.  You have time, but you need to get yourself ready – NOW.

Two critical pieces of evidence provide a strong indication that the bottom of the market in our sector will be reached in 2009. The Nationwide Historic House Price Trends since 1975 shows that the currently falling graph line of Average House Prices will dip sufficiently to break through the trend line in February 2009. After this date the graph line will certainly undershoot the trend until it flattens out. Analysing previous curves at this stage of the cycle shows that they take, on average, about 8 months to flatten having pierced the trend.  This evidence is corroborated by the latest Affordability in UK Housing statistics. These show that average house prices are now moving back into affordable territory. The index rose from 93.1 to 96.1 in the third quarter of last year. It is now likely to be close to 100. This level is significant as 100 points is the average price/affordability ratio since 1958.

Two other unknown factors will have an effect on the timing, the first is the reappearance of mortgages and the second is the clearing through the system of forced sales. Invariably at this stage of the cycle both professionals and amateurs alike miss the bottom and only wake up to its existence after it has happened. This is due to market momentum and cautious mortgage valuers continuing to play it safe and down value for longer than is necessary. The other apocryphal piece of evidence that is relevant is the tightening supply of good correctly priced properties in the middle and upper sectors. Most of these properties are owned by discretionary vendors who will not offer their property if they do not like the market conditions. Once the forced sales are cleared through the system this lack of supply of better properties will have a braking affect on further falls in that sector.

For these reasons, we believe that the next six months represent the best opportunity for purchasers since the early 1990s. Clearly the trick is to time a purchase just before the curve bottoms out when there will be the most choice. Making this timing coincide with finding the right house means getting into the market now.

You may also be interested in

view more

Summer 2010

The property market feels as if it has shut down early for the summer. 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...

Budget 2010 – What now?

As expected, the Chancellor did a good job of talking up major cuts and tax rises, before delivering a Budget that was more politically benign. 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...

POST-ELECTION BRIEFING

There is some detail emerging from the new Con-Lib Government, but uncertainty remains with many as the ramifications of changes and possible changes are chewed over. 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...

Post-Budget Briefing

Budget boost? 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,...

Start your property search today

Call us on +44 (0) 1594 842880 or complete the form below

    Your Details



    Your property requirements:

    Status:
    SoldThinking of movingOn the marketExchangingIn rented accommodationCash buyerIn need of helpOther


    We will never share your details with a third party. For more information about how we handle your data, please see our Privacy Policy

    How we can help you
    View our services

    When making probably the most important financial decision of your life, it pays to have the right advisors at your side.

    “You showed fantastic attention to detail, anticipated all eventualities, and provided timely and practical help and guidance every step of the way.  Above all, you supported me in making my own considered decisions, and I am so grateful to you for all your help in getting me to where I am now!”

    “We firmly believe that without Rachel and her skilled negotiation we would not have secured the property.”

    “We felt they genuinely wanted to help.”

    “Stacks’ performance on this assignment has been absolutely outstanding and more than met my expectations. Her understanding of the brief and the ‘after-find’ service set a standard of professionalism that I have not met before.”

    “It is not often that one is pleased to part with money but I can truthfully say that I am on this occasion. You have earned every penny of this cheque and what is more, you have done it with great courtesy and good humour. It has been very pleasant working with you. You really did take most of the stress out of our house hunting.”

    “Encouraging me to think creatively about what could work for me.”

    “Finding a plot not yet on the market and persuading the developer to enter into an exclusive contract with me to build to my specification.

    “I was impressed by the efficient, kind and courteous service provided by Stacks”

    “Stacks were a tremendous help and we would never have found our home without them. She is a lovely person with a great sense of humour which was essential during some of our tricky negotiations

    “You gave a much-valued ‘younger’ perspective on our situation, which was a real asset”

    “We found the service extremely helpful and professional at all times”

    “I have been delighted with the service I have received from Stacks and will not hesitate to recommend Stacks in the future.”

     
    Subscribe to our newsletter

    Receive updates about the world of property, straight to your inbox.

    * indicates required