Market Comment

Early 2011

The start of the New Year seemed to bring a flurry of activity to the market, with agents reporting a significant increase in new applicants registering, an increase in viewings and in contact from potential vendors.  However, as we progress through January, this activity seems to have slackened somewhat.  There has been the usual round of price reductions and/or the changing of selling agents on properties that have come through from last year, but new quality properties coming to the market are still very thin on the ground.  It is noticeable that the new Stamp Duty band is having some effect in that several properties marketed last year just over the £1m level have reduced their prices to below the new tax level.  This change may also lead to the earlier marketing of properties around that price band, rather than waiting for the more traditional spring market.

(NOTE:  The highest rate of Stamp Duty (currently 4% on purchases over £500,000) is to have a new extra rate of 5% on sales over £1 million, which will be applicable to the whole amount.  This change comes into effect on sales where the ‘effective date’ (usually the date of completion) is on or after 6th April 2011.  Where a house is £1 million or more it is obviously in the buyer’s interest to complete before April 6th).

The continuing Credit Crunch, some poor economic indicators, the Cuts, increasing living costs and inflation will all undoubtedly have a negative effect on the property market in general and time will tell to what extent.  However the number of top quality properties coming to the market in all price bands is still at a low level, coming as it does from a relatively small finite supply and, as always, there will be good buyers around for these.  This can lead to the rather unexpected situation of competitive demand, leading to some best bid situations in this sector, whilst the bulk market and more secondary properties are having to reflect the current market trends.

An increase has been noted in the number of vendors who, perhaps sensing the slower market conditions, are not prepared to openly market their properties although they do wish to sell at some point.  The suspension of HIPS’s has allowed agents to go back to the time-honoured practice of ‘marketing quietly’ e.g. seeing what interest there may be in a property, without going to the expense of marketing and brochures.  These properties are available to purchase – if you can find out about them.

What is likely to be a continued softening of the market and prices will present an excellent opportunity for buyers able to proceed with a purchase, who now have a stronger negotiating position than they have had for some time.

In what can seem a rather confusing and unpredictable market, the need for professional assistance is more important than ever:

To be able access the whole market – properties openly marketed together with those covertly available.

To establish weather the price guide is realistic or over optimistic.

To negotiate the best deal on behalf of the purchasing client – taking into account all the circumstances, including the expectations of the purchaser and the situation of the vendor.

The engagement of a professional buying agent is probably as important and valuable now as it has been for some years.

 If you are planning to use a buyer’s agent make sure you engage and brief them sooner rather than later, so that they can make you aware of properties now that are being prepared for sale in the Spring.