If the weather gets much more cold and dank quite a number of estate agents would probably welcome a bit of heat in the market – if only to keep them warm on viewings.
But the residential property market at the moment is not seeing huge rushes of activity which, believe it or not, Colin Shairp of Town and Country Southern and Fine and Country Southern Hampshire estate agencies in Drayton thinks may not be a bad thing.
‘When things get too frantic you get raging price acceleration which far outpaces the rise in income levels,’ explains Colin.
‘It has the twin negative effect of making vendors think they can ask far more for their property than it’s worth and potential buyers getting panicked about never being able to afford the property they want – so they stop looking!’ What the market needs is what it has now with regard to values. There’s no rampant price inflation of the type that would worry buyers with memories long enough to recall what led to the financial crash through market overheating.
The good news in a slower market is that lenders still need to lend so they have to remain competitive with borrowing rates and fees.
‘There was talk earlier this year of interest rate rises by about now but the Governor of the Bank of England, Mark Carney, seems very aware that consumers need to be nurtured and protected from interest rate rises in the short to medium term,’ adds Colin.
‘There are some very good fixed rate mortgage deals around at the moment and taking a fix for two or three years from early in the New Year may not be a bad idea. Failing that, for those who think rates will remain lower for longer, there are tracker mortgages that are tied to an often small percentage above Bank of England base rate. Of course, you should always seek professional advice before taking a mortgage and make sure you can afford it to avoid the risk of losing your home.’
A word of warning for both buyers and sellers comes from Colin about being realistic when thinking about property prices.
‘Home owners can get an inflated idea of what they think their property is worth and there’s not much that’s better at keeping potential buyers away than what they regard as an overvaluation,’ Colin explains.
‘I always try to keep valuations at the right level and for several months we have achieved as much as 99.1 per cent of the asking price when we sell a home. The mistake people make is to look at valuation sites, where much of the data is of necessity historic because of the slow market since 2007. Values shown do not always bear relation to values now and, of course, it’s impossible to tell what the condition was of a house that has a previous sale price against it.
‘Sellers in particular must listen to the advice of their estate agent when setting target prices and also when assessing offers. And buyers must get away from the notion that they can come in at 90 per cent or lower of the asking price. In the majority of cases it just doesn’t work. If it does, there’s probably never been a better reason to arrange a full structural survey to uncover just what it is that’s prompting the seller to get out!’
For more information contact Colin Shairp on (023) 9327 7277.