Market Review Summer 2005

Premier Property Search reports a stodgy market

The property market this Spring and early Summer has been epitomised by a distinct lack of urgency. While supply has increased since the election, the attitude of buyers continues to be one of caution – this despite a levelling in prices and a steady outlook, which is perhaps contributing to indecision.

The last few years have seen huge percentage increases in property values and anyone seriously looking for a house, especially those in rented accommodation, would have wanted to jump on the bandwagon to beat the competition and ride the wave. Now, however, prices are not rising as steeply and this is allowing buyers the luxury of standing back and taking their time. Supply has been good, also creating indecision. However it is the forced sale, most notably due to divorce, that has significantly bumped up the numbers of houses coming onto the market.

Since September 2004 there has been a notable drop in the number of properties being bought before they hit the open market. Intelligence is still readily available to the better buying agents, but for the most part their clients are not paying the premiums in excess of the guide prices to secure the deals. In the past such activity was very much the norm, but a turning of the tables is symptomatic of a lack of confidence. Most buyers would feel better to see their bid underpinned by some competition. Buyers, who might have paid premiums last year, confident that their winning bids would be justified by swift increases in value, are now more cautious in a slowly rising market and don’t want to be caught out by paying over the odds. Of course, there are exceptions for the very best properties and it is still the case that good period homes, in the better locations, will sell well. Such price sensitivity is nonetheless widespread, and is creating a stodgy market.

Nigel Sellers, Director of Premier Property Search, comments, “We find that we are frequently bidding against the vendor’s expectations of value, rather than that of any competition for the property. Such high asking prices are certainly a hangover from the better market of last year and selling agents are in a continual battle to educate their clients in realistic valuations. Any property that comes to the market over-pitched will invariably stick and unless vendors are prepared to be flexible, buyers will simply walk away and buy elsewhere. We are also finding that buyers are being increasingly pedantic. Whereas last year they would often take survey or legal issues on the chin, they are now taking note of the smallest details and either insisting on their being ironed out or instructing us to negotiate hard.”

2005 and beyond

Predictions for the foreseeable future are never easy, but it is likely that we can expect a stable and slowly rising market. A reduction in base rates coupled with limited supply will keep things ticking over, although much depends on the London market which at present is quiet. Sellers explains, “We have a number of clients lined up to use our services in the country who are not even getting viewings on their London properties. When they do finally get a buyer, the consequent chain is often very fragile indeed. However, we are bullish about the next twelve months. There is still a lot of money out there, sitting on deposit and waiting for the right property to come up. With some realism entering the market, there should be significant activity.”

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