There have been a lot of grim stories in
the media. But the housing market is more complex than the headlines. Could now
be a good time to snap up a bargain? We asked the experts…
The housing market has been suffering since
the credit crunch, but behind the gloomy headlines is a more complicated
reality.
While house prices fell for the fourth
month in a row over January, nationally the falls only affected 23 per cent of
the country, compared to 30 per cent in December, leaving 77 per cent of the
country unaffected.
And although loans for house purchase are
down, and buyers are adopting a wait-and-see attitude, website traffic reveals
that people still remain very interested in bricks and mortar.
Our stats here at Rent Sell Me A Property
showed a 19 per cent year-on-year rise in visitor numbers in January, a trend
that suggests there's still a large number of potential buyers keeping their
eyes on the market.
Commenting on the figures, our own expert,
says: "A cooling market has put buyers in the
driver's seat, and with prices falling in some areas there are undoubtedly
deals to be done.
"Supply is up and demand is
down, so now, before the spring surge kicks in, could well be the perfect
moment to snap up a bargain."
That point is borne out by recent figures
from Home track revealing that sellers are accepting offers at an average of
93.5 per cent of asking price. Not great for them, but a relief for struggling
first-time buyers.
But does it really make sense to buy
now? We asked seven experts from the
industry to read the tea-leaves.
1. The Biggest Bear In The Forest
First up, let's start with the man who
thinks the market still has a long way to fall.
Jonathan Davis, Chartered Financial Planner
and Managing Director Spokesman for House Price Crash, has been waiting a long
time for a downturn and is gleefully predicting a bloodbath:
"It's a great time to sell, but
there's no one buying. Buy-to-let is effectively dead so no one is buying at the
bottom of the chains and they are falling apart.
"I think prices will fall by about ten
per cent this year, and around 35 per cent over the next four or five years,
but the timing depends on which part of the country you live in.
"We should be looking at house prices
falling until 2010 in London and the South East England and up to 2012 or 2013 around the
country.
"If you're trading up it's a terrible
time, but it's a brilliant time to rent because there's a massive glut of
properties available and owners continue to offer great deals."
2. The Bullish Economist
Economist John Wriglesworth of the
Wriglesworth PR company has long been a
bullish reader of the market and takes the opposite view. He insists that no-one with plans to stay put
for a few years should be afraid to step onto, or up, the ladder:
"It's a good time to buy as long as
you're in it for five years or so, not looking to make a quick buck.
"Over the longer term house prices
will grow because of lack of supply. There's population growth, the green
lobby, immigration, divorce, demand for holiday homes, and with a fixed supply
and growing demand there's no way other than up.
"We've probably reached the end of the
boom, but if you're wanting to get onto the ladder it doesn't really matter
when you get on. Prices won't crash, and in the long term you can't lose."
3. The Buy-To-Let Guru
As for buy-to-let, David Lawrenson, author
of the best-selling Successful Property Letting: How to Make Money in Buy-to-Let, is not
slipping on the black armband just yet.
Quite the opposite, though he urges
investors to do their research:
"It's an extremely good time to buy
investment property. Vendors are willing to take offers and you can generally
get very good deals, depending on the area.
"First-time buyers are getting scared
by the headlines and they're choosing to rent. Rents are going up very strongly
and will continue to do so. I'm buying, and the other investors I know are very
excited about the opportunities available now, especially from the auction
houses.
"One problem for both first-time
buyers and buy-to-let is that though the base rate may be coming down, the
margins charged over the base rate have increased and the fees are going
higher.
"And there is an oversupply in the
landlord market of one- and two-bed flats in the cities. Look for properties anywhere where the
transport infrastructure is improving and buy two- and three-bed houses in
areas with strong economies. Avoid the oversupplied one- and two-bed identikit
flats.
"If I was a first-time buyer I'd get
on with buying now. Come the end of the year the opportunity may be gone."
4. The Mortgage Broker
Given recent headlines about mortgage
lenders scaling back and rebuilding profits, we asked a broker, David
Hollingworth from independent mortgage broker London and Country,
for a view on the current state of play. He says:
"In terms of getting a mortgage, for
the vast majority of mainstream borrowers with a deposit who are not looking to
stretch on their income, there's not really a problem.
"While trackers have worsened a bit,
fixed rates have been coming down so it's not all bad news.
"High loan-to-value pricing is higher and some people
have withdrawn from that business. But there are still deals on 95-100 per
cent, and if you have a ten per cent or more deposit there is still a healthy
choice of products.
"For some people this is about timing.
It's not such a bad idea to keep an eye on the market at the moment. People are
waiting to see if they hang on for six months whether they'll get a cheaper
property."
5. The Buying Agent
Tracy Kellett at BDI Homefinders, who works
on behalf of buyers, says the market is variegated at present, and is by no
means in freefall:
"We're finding it a two-tiered market.
The differential is quality in terms of both location and standard of the
house. We're seeing the lower end stuff, for example the buy-to-let properties,
going south pricewise.
"Good quality properties, such as
traditional family homes in good areas are holding their own. The prices of
these properties aren't falling because of a lack of stock and the fact that
there are plenty of buyers who have got enough money.
"We don't believe people buying
quality property are going to see much growth, but prices are not going through
the floor. The alternative, renting, is expensive and there's a lack of good
rental stock.
"There are much more considered
purchases going on. The madness of the spring and the summer is over.
"Last year I was at a viewing in
Ealing where there were thirty people in a semi, and they were having to make a
decision under pressure on a £1.3 million purchase. Now it's a much more
realistic and considered market."
6. The London Estate Agent
Julian Reid from Savills, Stoke Newington
Branch says:
"I think it's a much better time to
buy than this time last year if you intend to stay in a property for the medium
term.
"Selling is slightly more difficult
because there are not so many buyers. But anything that comes on at the right
price still sells.
"For our bread and butter, a
two-storey terraced house, we'll generally get an offer within two to three
weeks.
"Oddities are taking longer. But you
will always get the odd one or two with fantastic demand, for example, because
of school catchment areas."
7. The Provincial Estate Agent
Neil Rose at Savills, Harpenden, says:
"We're being positive because we're
getting good quality registrations and a lot of viewings and bids. The
underlying view seems to be that people are just getting on with it.
"We do a lot of open houses and
recently I got about 30 viewings on a detached house close to the station and
good schools.
"In the mid range, people aren't so
affected by borrowing. Some people were worried at the lower end but flats in
the £200-250,000 range are getting good viewings too. But action on the £1
million to £1.5 million sector is not so strong.
"I don't see property prices as
drastically different to last year. Asking prices are coming down but that
tends to be on properties that were too high to start with. I don't think
anyone's being tactical, they're just moving when they need to."
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