What’s happening in the market now?

publication date: Feb 21, 2013
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
Download

What’s happening in the market now?

Property Market Analysis

Latest data suggests the current market is picking up slightly. This is mainly thanks to the Funding for Lending scheme by the government which is helping to ease lending restrictions, supplying first time buyers with 95% mortgages so they don’t have to find ridiculously high deposits.

Although the market for each property is different depending on the local area, it does appear buyers and sellers are becoming more realistic. Not holding out for unreasonable prices and buyers being more committed to moving rather than ‘just having a look’ is starting to make a difference.

We are a long way from the housing market recovering, but for now it seems stable and any news suggesting the market may be getting a bit busier, is good for consumers and good for the economy.

Hometrack analyses property demand and supply nationally and in the local markets. This helps us to understand whether prices are moving up or down in individual areas. According to Hometrack’s December data:-

  • The average time to sell a property is speeding up, reducing from 10.2 weeks in January to 9.7 weeks in December 2012. This is good news for the market as it suggests properties are selling faster and buyers and sellers are being more realistic and better prepared.  The market though, is still some way away from the average 6-8 weeks pre credit crunch.
  • With regards to how much buyers were offering, there was no change – so offer prices were around 93.2% of asking prices.
  • Also staying the same is the number of people viewing a property before an offer is received. This remains at 11 viewings and suggests demand isn’t increasing, but those who are buying/selling are doing so faster than they have in the past.

As with property prices though, these ratios vary on a regional basis. London continues to outperform the market:-

  • Greater London’s offer to asking price ratio is 94.7% with homes continuing to sell fastest at 5.9 weeks
  • The South East has the next highest offer to asking price ratio of 93.6%, selling a home within 7.7 weeks
  •  East Anglia follows closely by with offer to asking price ratios of 93.6% and taking 10.7 weeks to sell
  • The North East has the worst offer to asking price ratio at 91.7% and is taking 10.5 weeks to sell a home
  • The East Midlands remains the region taking the longest to sell a home at 13 weeks, but has a reasonable offer to asking price ratio of 92.8%

For Sale Sign Analysis (FSSA) provides figures which helps us track the number of properties for sale versus sold. This analysis is very similar to board counting which you can do at your own local level to work out if the market you are operating in is rising, static or falling.

Once you have carried out your board count, check it against the following guide:-

  • A fast moving market will see four out of ten or more boards sold within 6-8 weeks.
    Offers will be 96%+ of asking prices eg if your property is marketed at £100k, offers are £96,000 or more.  
  • A static market is where supply matches demand, approximately three out of ten properties are sold. Properties will take eight to ten weeks to sell and have an offer ratio of 94-95% of the asking price.
  • Falling markets (where you can get good deals if buying) typically only have two out of ten properties or less sold. Offers would come in at 93% or less of asking prices and take 12+ weeks before an offer is accepted.

The FSSA data shows 2012 started out being down on 2011, with only 21% of properties sold versus for sale. This picture changed dramatically in March when the number of properties sold jumped to 29%, remaining at this level throughout the rest of the year (bar October when the market had an unexpected slump).

FSSA Data

The top five performing markets for December by FSSA are:- 

Area

Sold versus
for Sale Ratio

Battersea

62.2%

Lewes, West Sussex

58.2%

Dulwich

57.1%

Horsham, West Sussex

56.4%

Crowthorne, Berkshire

52.7%

Healthy Property Markets in December

According to the FSSA data, the local markets of Stonehouse (Gloucestershire), Kingswood and Fishponds (south Gloucestershire), Andover, Hampshire and, Newmarket in Suffolk are currently stable, with around four properties out of 10 for sale having sold during December. Colchester and Romford in Essex are both very close to becoming ‘stable’ markets, with just under four properties out of 10 being sold in December.

Blackpool and Chorley were the worst performing areas during December, registering just one property in every 10 for sale being sold, with Wednesbury in the West Midlands and Preston, Lancashire selling just over one property in 10. According to Land Registry data, the average property price for Lancashire this October was £106,531, having fallen back to November 2004 levels and is also -21.89% down on the market high of December 2007.

To learn how to carry out the for sale versus sold board count yourself, visit the Property Checklists website and sign up for (which one? ) You can also find over 30 property checklists to help you to work out what to do and when for any property project. 

Another useful source of data to help us understand the current market comes from estate agent members of the Royal Institution of Chartered Surveyors (RICS).  This report is extremely useful as rather than concentrating on property prices, it looks at the supply and demand of properties across the UK.

According to the RICS January’s survey, transaction levels increased during the month and recorded the fourth consecutive positive reading, however new buyer and instruction levels dropped back slightly from December.

The RICS commented “The pickup in transaction volumes is being supported by falling mortgage rates (the 2-year 75% LTV rate has dropped 40 basis points since June 2012). Indeed, net secured lending to individuals increased to a seven month high in December, indicating some success from the government’s Funding for Lending Scheme”.

The NAEA reported “The UK housing market in December saw a gradual slowdown in activity across supply and sales levels with the number of first time buyers entering the market also decreasing. However, interest in property saw a surge in the last month of 2012. Interest in property was the only area of the market to see a rise in numbers between November and December 2012 with 282 house hunters registering with an NAEA branch compared with 263 the previous month”.

However, the NAEA went on to say, “Supply levels told a different story with the number of properties available for sale during December 2012 dropping to their lowest point in nearly three years. Although some of this drop can be attributed to the traditional Christmas slowdown, the overall contraction in the level of stock reflects continued unease amongst sellers who are reluctant to put their house on the market given consumer uncertainty in the wider economy. Overall sales levels and the percentage of sales to FTBs also decreased last month. The number of sales made per NAEA branch decreased from an average of 7 in November to 5 in December, its lowest level in a year”.

If you are thinking of buying, selling or investing, then visit Property Checklists or why not buy into our unique One to One Property Services. You can purchase our First Time Buyer Service, which explains everything you need to do and how to choose different services. Our Sellers Service will help you value your property to secure a sale and choose the right agent to sell your property for you. The Making Money from Property and Buy to Let Service will help to set your property investment objectives and find the right property in the right area to purchase.

Our unique, independent services give an A4 ‘how to’ guide, containing dos and don’ts, factsheets, checklists, handy tips and forms. Plus, access to Kate and her team, by phone and email, for an essential 3-4 queries you might have during your project. 

For more information visit the Designs on Property website.

For further in depth analysis by Kate Faulkner, also read:-


Need help with a property problem? Have a question? Why not call Designs on Property on 01652 641 722 or Contact Us via email.
NALS Conference Chair 2016

Kate's Consumer Portal

Propertychecklists.co.uk

FREE Buy to Let eBooks

Download a copy of our
Buy to Let Show eBooks
for FREEsimply click on
the image below

Buy to Let Show - download our Buy to Let eBook for FREE