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With the news of a dramatic reduction in interest rates of a huge 1.5% and the consequential reduction in monthly mortgage repayments many people are speculating that the dramatic fall in houses prices may be coming to an end. Leading local estate agent, Simon Wilkinson commented, "We have seen the fastest ever recorded drop in house prices over the last 12 months, the internet and speed of information has accelerated this fall and with the enormous amount of pent-up demand, the market could very easily bounce back quickly as there is a shortage of property on the market." Fundamentally the number of new homes being built is dramatically lower than the Government's own predictions of what is required to keep the market in equilibrium. Indeed many house builders will now take some time to start building again in reasonable numbers. Many potential homebuyers have sold up and gone into rented accommodation with large sums of cash safely tucked away, as these buyers wait for a return to stability, possibly in the spring of next year, they may well find that the market has turned and that by then, they will realise that this autumn was the ‘bottom of the market'. For first time buyers, this is great opportunity as they now find themselves able to step onto the housing ladder, for many, they have actually been able to save up a deposit over the last few years, as ironically, they could not afford to buy. Home Information Packs (HIPs) have and continue to put potential sellers off moving, this barrier of an upfront fee has reduced the numbers of people speculating about a move. Worryingly, the situation is set to get much worse as from 1st January, a HIP must be in place before you can even tell anyone that it is coming on the market, as to do so will be an offence. Accordingly, buyers will soon start to find increasing competition as the pendulum swings back from a strong ‘buyers market' to a more even situation or even a ‘sellers market'. Also many prospective buyers who sold last year are becoming frustrated at living in someone elses' home and paying some elses' mortgage. These buyers, usually with very large sums in high interest accounts are also starting to buy. Mortgages are now very affordable and whilst high percentage mortgages are still difficult to obtain, many buyers do have large deposits to put down, they are simply holding off until prices stabilise. The signs are that with a few months of a stable market, buyers will once again, want to own a home of their own. |
