Welcome to the latest 2021 Property Market Comment:
Certainly, this year has seen more intense activity than many new people to the industry can remember. However, when we speak about the property market, booms, etc, it’s important to remember that there are two elements to consider.
On the one hand, you have price movements, and on the other, transaction volumes. In other words, what prices are being achieved, and how frequently? It is the balance between these two that powers the market.
This year, we say the property market is strong – and indeed it is, meaning that we’re regularly achieving higher than expected prices. If a property comes to market, it is usually able to attract a buyer who’ll pay the asking price (and sometimes above asking price) very quickly. Sometimes, we’re even able to sell properties to pre-qualified buyers before the property is listed on the internet and some transactions are going to sealed bids or auction.
2021 is a year like no other. Although the economy shrank by 1.5% in the first quarter of the year, it grew by 2.1% in the last month of that quarter. While hikes in property prices are a delight to some, they also cause concern to others.
Certainly, the property sector is now rapidly moving from cautious optimism to outright confidence. The combination of the release of pent- up demand following years of Brexit confusion, and then a year of lockdown, along with the Land Transaction Tax (Stamp duty) concession and a surprisingly positive economic outlook all point to one thing – a substantial increase in demand for property, prompting ever - higher prices (so far over 6% this year according to the Nationwide Building Society).
But where do these buyers come from? You might expect that, apart from first time buyers, who make up approximately 20% of the market, mostly at the lower end, anyone looking to buy would also be expecting to sell, and the market should be therefore “in balance”.
The problem is, because so many properties are selling before they never even made it to a website, people’s perception is that there is nothing available to buy. So whilst they themselves keep looking, they don’t put their own on the market because they are worried they would sell before having found somewhere else to buy - classic chicken & egg situation. This is one of the reasons why there are reports of there being 6 buyers chasing every property.
No wonder prices are rising. But the market only has itself to blame for this. Sellers inevitably decide who buys, and at what price they are prepared to sell for - If you are trading up in a rising market, it’s even more important that you act quickly. This is because if your £200,000 sale increases in value by say 10%, and your £275,000 purchase has also increased by 10%, then you’d have a £7,500 shortfall. So we say, have confidence - if it’s time to move on and more people put their property on the market, this in itself will help ease the pressure.
If you are looking to move, do put your own property on the market as soon as you can. This will not only give you time to get the legal ball rolling with your conveyancing but, in a highly competitive market, you’ll be regarded as a red - hot buyer by estate agents, putting you in pole position to be offered those properties first! There’s probably been no better time to take advantage of the current market than right now!
From the team here at Williams & Goodwin may we extend our best wishes for a safe, healthy and Happy Summer Property Market!
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