Property expert Richard Sayer argues that, far from being a bad housing market, this is a good time to be dealing in property.
WE have been relentlessly told over the past 18 months that this is a bad property market. But bad for whom?
Were the sharply rising prices of the first half of the decade to everyone’s liking? We kept being told prices were too high, first-time buyers couldn’t afford to get on the ladder and mortgage costs were excessive.
Well, in this bad property market house prices are down 15%, mortgage rates are available at under 4%, inflation is dropping to zero and even food and fuel costs are dropping.
If this is such a bad market, where else are people trusting their investments? To the vagaries of the stock market, with bank saving rates at 2% or less, with even our trusted banks no longer deemed wholly safe? With shares and even bank savings, you can lose 100% of everything! In this bad market, I repeat that average house prices have only dropped 15% from the peak levels of 2007, which we all know are double those of a decade earlier, how bad does that sound?
There is no doubt that the smart money is once again looking at buying property. This includes investors who have “been studying the form” for months, and in increasing numbers you and me, the ordinary home movers. House prices have dropped and in some cases real bargains are available well below the average 15% reduction, with cheap mortgage money for those with a deposit, typically the second and third time mover climbing up the ladder really has everything to gain. Your £100,000 house has dropped £15,000, the £200,000 one you are buying has dropped £30,000 giving you a huge cash saving on the so-called good market of two years ago.
The investor/buy to let market is seeing they can buy a good property cheaply, with cheap mortgage funding and yet probably get a higher rent today than two years ago.
To speak personally for a moment, over the past three weeks we have consistently had the best sales and activity results across all our offices for nine months with house viewings and offers sharply up followed by increasing numbers of realistically priced houses on the market.
We are finding unprece- dented numbers of financial advice appointments where people are confirming how much they can borrow and the cost of the monthly mortgage payments.
If mortgage products are released enabling first-time buyers with a 10%-15% deposit to get a house at a fair mortgage rate we will see a quick increase in demand for all types of property as the activity wave rolls through the market, at present they are being penalised with two high rates.
There is some historic overpriced housing stock still out there, but increasing numbers of well priced, excellent homes are being advertised and sold quickly.
I don’t think this is a bad housing market at all. With the right advice it is certainly the very best time to move house, particularly for the vast majority climbing the housing ladder.
Some are still waiting for prices to drop further but the real opportunities to win in this market are right now.
When it becomes obvious to all that the market is once again rising, you will indeed have missed the best chance!
Richard Sayer is a chartered surveyor and director of Rook Matthew Sayer which has branches throughout Tyneside and Northumberland. For information about the company go to www.rookmatthewssayer.co.uk or tel: (0191) 246-3696.
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