Kate Faulkner presents her local property report on BBC Radio Nottingham with Frances Finn
Nottingham Property Analysis June 2010
LISTEN AGAIN TO RADIO INTERVIEW - (from approx 9.10am)
Currently we constantly hear from the media that prices have risen (this month) by anything from around 8%. This information is completely misleading to anyone within London and anyone outside of London for the simple reason London prices are currently rocketing up, by 20% in some areas of central London whereas across the rest of the country, property prices are really fairly stagnant, bar a few pockets of property price growth.
Nottingham’s market continues to mirror other areas across the UK, in that some areas are still starved of stock, so prices are moving slowly upwards, whereas other areas are still suffering from too few buyers and too much stock, so prices are still heading downwards.
Good news is though:-
Fairly priced property is selling faster than last year
Slightly more stock coming onto the market, so more choice for buyers
Bad news is that:-
If you over price your property from the start, you will struggle to sell
What buyers are looking for:-
Major renovation or a home they can just move into, anything 'inbetween' is unlikely to sell!
Top tip to sellers: “Price properly and make sure your home is a wreck or in great condition and as people start their search online, have fantastic photos!”
Forecasts for residential prices
Short term, while impact of government cut backs is felt, people are likely to stay put and as lending is still expensive versus pre credit crunch, especially with the only good deals available with a 25% deposit, then prices will be held back.
What will also happen over the coming months is property price reports will be compared to ‘good figures’ from 2009, so commentators are likely to say the market is stalling. This typically has an impact on property prices for around 3-6 months as buyer’s ‘hold back making offers’ just in case prices fall. Inevitably, they fall, so next reports suggest prices are falling.
So current forecasts are property market will be fairly stagnant for the rest of the year, but when finance is loosened, 5-10% deposits become ‘the norm’ from lenders, it’s likely that property prices will rise.
QUICK POST BUDGET PREDICTIONS FOR PROPERTY
Next few years property prices and sales volumes are likely to be held back. Any increases will be driven by London and well off, economically successful areas.
The next 5 years are looking good and the next 10 years excellent!
The rationale for the above is due to the current government not really seeming to want to do much to grow the housing stock, so supply is likely to be much more limited. Less money in the economy from cuts and taxes will reduce people's ability to buy homes and sellers desire to 'move on'.
Rents though over the next 12 months could rocket, particularly for the nicer properties in the better areas. So it’s essential to tie down your rents NOW to avoid big increases in the next six months!
Other changes in the property market:-
- Stamp Duty, currently no stamp duty for first time buyers,
but no news of this being made permanent in the budget
- Building in your garden, new coalition likely to make it more difficult for developers to build on garden land
- Decentralisation of planning and scrapping housebuilding targets by the new coalition is likely to restrict housing stock in the future, this could cause prices to rise once we are in full economic recovery.
- Rushed through rules by the Labour party requiring planning permission for properties that landlords rented to three or more sharers may now be relaxed with the decision to implement or not, being given to local authorities.
- VAT increases to 20% will increase renovation costs and the costs of buying and selling a home.
For a complete analysis of the whole property market, take a look at Kate's latest Property Market Update.