After 2 months of the New Year accounted for, how are we to interpret the varied data and forecasts for the Housing Market for the rest of 2009?
Important data has just been released by Hometrack, the housing data group. It surveyed just over 1800 estate agents and surveyors and also uses date from the Land Registry on completed sales. Its main findings were that new buyer registrations were up by 17 per cent and agreed sales up by 36 per cent in February. Demand for houses was strongest in London, South East and the South West of England.
This data follows on strongly with news from Rightmove, the property website, that it noticed an increase in buyer enquiries in January and a suggestion that with low housing stock on Estate Agents books, this could lead to an increase in average asking prices over the next few months.
Where are we then? My opinion, through the information available to me both as a Conveyancing Solicitor with Clutton Cox, http://www.cluttoncox.co.uk and as a Director of ActionMove, a leading Home Information Pack Provider (HIP), http://www.actionmove.co.uk is that we are still some way off any recovery.
Margaret Beckett, the Housing Minister, was on record stating that even a Housing Market recovery might be just around the corner. She told the Sunday Times recently that "we're hearing indications of certainly a maintenance of customer interest, possibly even a bit of a pick up".
News last week that Northern Rock will be allowed (subject to clearance from Brussels) to lend to house buyers again, will aid the perception that the Credit Crunch may be easing. Accompanied by the news that the Government in April will introduce guarantees to allow Mortgage Lenders to once again have access to big institutional funds, there could be reason for increased optimism. Yet, we cannot ignore the doomsday scenarios of further price falls of between 10 - 30% in the Housing Market in 2009, proposed by some commentators.
First time buyers are still struggling to find sufficient deposits to get themselves on to the housing ladder. Margaret Beckett urged would be first time buyers not to delay as she indicated that "when the upturn comes, there will probably be a mad rush". Yet this is confusing when linked to the high deposits that First Time Buyers now have to amass. Availability of credit remains, at least for the next few months, the major hurdle to a sustained recovery.
However, what we may be witnessing is the slowing of the speed of price reductions in house prices. This will be a necessary precursor for the stability in the Housing Market. The market floor may not have been reached but we may be closer to it than at any time within the last four months. Savvy buyers are out for value and canny sellers are realising that to do the deal, compromise must be reached. As Yolande Barnes, residential research director of Savills the Estate Agents said recently "We are far from seeing green shoots, but the seeds are about to be watered".
Twist, Stick or Bust then?
If you are buying and selling, it is important to realise that any reduction in the sale price can be offset by bargaining hard on your related purchase. If you are buying and worried that the floor has not been reached, think about the Housing Market in 1990 during the last recession. If you purchased at that time, although the market had not bottomed out, you would be sitting on a rather nice profit now. If you are selling only and bought within the last 2-3 years you may be unable to realise any profit.
Short termism in the Housing Market is definitely out for the foreseeable future. However, Property for the long haul would, as always, still appear to be a handsome bet.
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