Current Property Market Analysis: Is now the time to sell your home?
We know from our ‘past property market' analysis that prices over the last few years have hardly fluctuated at all. However, the current market shows prices are softening slightly month on month at the moment, suggesting 2012 is likely to be a quieter year than 2011.
So far we have seen a boost to the year's activities as first time buyers have rushed to purchase properties to avoid paying Stamp Duty between £125,000 and £250,000. We also saw a ‘shock' to London's sales for the first time, as the surprise 7% Stamp Duty for properties over £2 million and for those buying through overseas companies, rush property purchases through to avoid paying tens of thousands of extra tax on property.
With recent announcements of:-
- Double dip recession in the economy
- Inflation not slowing as hoped
- Unemployment on the rise
- Mortgage rates rising despite interest rates not increasing
people are starting to really feel a real pinch on their wages and confidence, and as a result, the current property market, which has been quite buoyant up to the summer, is likely to be fairly slow over the coming months and as such if you are looking at selling, either try to do so now, or hang on until the Spring of 2013.
We use a variety of resources which we find are useful in assessing what is actually happening in the current market and their data gives you some local information which can be extremely useful when working out whether now is a good time to buy or sell.
Hometrack tracks what is happening to demand and supply which is a key indicator in influencing what happens to property prices. According to Hometrack's April data:-
- Time to sell a property is around six weeks in London and 12 weeks across the rest of the England
- Buyers on average are offering 93% of the advertised property price
(for example, if a property is for sale for £100,000 they will offer around £93,000).
- The lowest offer versus advertised price is in the North East and is at 91%,
and the highest is 94.5% in London.
From their analysis and taking into account the issues currently facing buyers and sellers, based on current market analysis, they "expect price rises to flatten out as we move into the summer."
Hometrack Analysis Year on Year Comparison
The figures below compare the long term averages for property market performance which include:-
* Average of 95.7% for offer to asking price
* Requiring 10 viewers to secure a sale
* Taking six weeks to sell a property
The chart below compares 2012 to 2011 and as you can see, the average offer to asking price is well below the long term norm, while it's taking 11 viewings rather than 10 to sell a property, and the average number of weeks to sell a property is fluctuating between 9-10 weeks, well above the 6-8 week norm.
For Sale Sign Analysis (FSSA) carries out a useful measure which you can also do yourself. It records in different areas the number of boards sold versus the number which are still for sale. This helps to establish the demand and supply for individual property types in the area you are looking to buy or sell in.
According to FSSA, after a slow start to the year in January and February where on average for every ten properties for sale, just two were sold, March and April figures have improved. This is likely to be due to buyers wanting to take advantage of Stamp Duty relief. Latest data suggests three properties out of ten ie 30% have sold, the highest since May 2010. This suggests sellers are being realistic about what properties can be sold for and buyers are keen to purchase. However, there are stark differences within areas recorded by FSSA and below we explain how to work out for yourself if the current property market you are in is buoyant, stable or falling:-
- A buoyant market will have more than 4/10 properties sold versus for sale, properties will sell within 6-8 weeks and offer versus asking prices would be around 95% or more.
- A stable market will have around 3-4 properties sold for every property for sale, properties selling within 8-10 weeks and offers around 95% of asking price.
- A falling market would have two or less properties for sale versus sold, properties will take 12 or more weeks to sell and offers will be being made at 93% or less than the asking price.
Top five performing areas recorded for April by FSSA
Cambridge, which is recording 58.4% of properties sold versus for sale, ie 5.8 of properties out of 10 for sale have sold. Chessington in Surrey, Hassocks in West Sussex and Wimbledon have 50% of properties sold while Fleet is just under the 50% mark.
Local markets which are stable, ie around 4/10 properties for sale are sold include Burgess Hill in West Sussex, Borehamwood in Hertfordshire, Aylesbury, Banstead in Surrey and Catford in the London Borough of Lewisham.
Areas which are struggling to perform well and it will be more difficult to sell a property include, Wakefield where just 1 in every property for sale is sold, Urmston in Manchester, Kidderminster in the West Midlands has 1.4 properties sold versus 10 for sale; Stretford in Manchester and areas such as Wells and Glastonbury are selling just 1.6 properties out of every 10 for sale.
The FSSA data is supported by another useful source of data which is from information provided by estate agent members of the Royal Institution of Chartered Surveyors (RICS). So far, this suggests 2012 is fairly static property wise with average sales at around 16 properties per branch, slightly higher than 2011. Stock levels remain fairly similar, supporting the FSSA average statistic that sales so far this year versus properties for sale have been buoyant.
So if things are going up in some areas, stable in others and falling in different areas, what is likely to happen in the future and what does this mean if you are buying, selling, investing, building or renovating property?
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