Last year we predicted a slow start to 2009, prices levelling off during the first six months and more activity from buyers, with sellers achieving closer to the asking price.
The reality has been similar to that predicted. There was a very slow start to the year despite the record low interest rates. This was down to the concerns about the recession and the thought of house prices continuing to go down.

In March, there was a slow but marked increase in the number of buyers registering, although many of these were effectively only ‘window shopping’. Over the Spring period, the press started to report that prices were stabilising, which in turn led to a number of news articles suggesting that the recession would soon be behind us and that the housing market was on the mend. Spring was however relatively quiet.

By contrast, May and June saw a large increase in the number of first time buyers and other buyers with nothing to sell looking to buy while the house prices were arguably at their lowest. On the reverse side however, there has been a significant lack of new properties coming onto the market as house owners themselves (particularly those who have bought in the last four years) continue to struggle to come to terms with the value of their property, with the reduced amount of borrowing available to them and therefore
with their inability to move. The shortage of supply in property, combined with the increase in serious buyers, has resulted in owners achieving much closer to the asking price. It is still a buyers’ market, however prices have certainly stabilised and in some situations, buyers are having to enter into competitive bidding to secure the property they want.

The outlook for the remainder of 2009 is reasonable with prices dropping perhaps marginally as we approach the year end. Much depends, however, on the interest rates on offer for those wishing to borrow money. The rates for those borrowing between 80% and 90% are still exceptionally high and we must wait and see whether lenders make the rates more attractive, and equally whether they start offering 95% mortgages again. That said, many first time buyers continue to be out in the market looking for a bargain – as are the buy to let investors, many of whom have put off investing their money until now.

2009 was always going to be a year of recovery for the housing market, which it has been. 2010 by contrast should be the year that consumer confidence returns and the housing market starts to get going again. We expect a brisk start to 2010 with plenty of activity and some increases in prices early on in the year.

David Clayton
Managing Director

This entry was posted on Monday, October 5th, 2009 at 3:35 pm and is filed under Highlighted News .