Latest reports from the National Association of Estate Agents show a jump of 25% in the number of properties for sale compared to 12 months ago.
Sellers have become more realistic with price expectations when putting their house on the market. Supply is currently meeting demand giving rise to a more stable market, at least in the short term. This is good news in an otherwise depressing housing market but RICS housing spokesman Michael Newey reports that activity is still very subdued.
Lending has become more relaxed since the credit crunch particularly for FTBs but there is still a long way to go before we reach pre-credit crunch levels.
According to Rightmove in April 2011 more people put their houses on the market but, with the exception of London, there are not sufficient buyers. The increased seller numbers has resulted in a large amount of unsold stock since May 2007 with estate agents. With supply outstripping demand the average asking price in London has increased to a new record of £431,013. With base rate rises on the horizon sellers should adopt the same tactics as sellers and be realistic on expected price. Asking for less rather than more would put sellers and their estate agents in a more favourable position than their less realistic competitors.
Sales are also likely to increase if lenders begin easing their lending criteria.
Over the longer term, seller enthusiasm could create a downward pressure on prices as the mismatch between supply and demand that had previously supported prices in 2009/10 narrows down. The January Hometrack report shows that sellers, on average, offer a 9% discount on their property – welcome news for FTBs. Selling prices for May are holding close to May 2008 figures at just 1.5% less than May 2008’s peak of £242,500.
Optimists are predicting an increase in selling activity by 2.2% for 2011 followed by 16% over the next four years with mortgage approvals increasing by 5% by 2015.
We will see what happens!
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