As safe as houses: Our 2010 predictions
Multi-award winning estate agents, The Wilkinson Partnership expect a steady improvement to the market in 2010, if current conditions continue.
Simon Wilkinson observed, There are a large number of external factors, all of which will influence property prices and the market, the two biggest being a general election and the FIFA World Cup.
Both of these events traditionally have an impact on the property market and as recently announced by the Shadow Housing Minister Grant Shapps, it is the Conservative Governments intention to scrap HIPs within a hundred days of coming into office. This in its own right could well delay home owners from putting their property on the market in the run up to the election and then see a surge in supply when they are abolished.
Similarly the World Cup will mean that many sellers and buyers will be indulging in the football euphoria, rather than looking at houses, thus sales will be down for the period.
Barring sudden and unexpected crises as yet unforeseen but on equivalent scale to the property price crash in Dubai in late 2009 it is clear that there could well be winners and losers in 2010.
Whilst the outlook for interest rates is for them to remain low and stable for 2010 the mortgage market is improving gently with a wider range of mortgage products now available and 90-95% mortgages which were almost impossible to acquire in the spring of 2009 are again widely available. This wider availability of mortgage finance will again encourage the market and prospective homebuyers who have delayed buying a home will be able to enter the market whilst house prices will continue to increase.
The Wilkinson Partnership valuers are now conducting free valuations for homeowners who would like to move, but as they have took a mortgage out with high multiples of income some years ago, they cannot actually borrow the same amount today on a new deal. Ironically, many of these borrowers are actually repaying at a faster rate than they need as interest rates are so low. When this pent up demand is released it will boost the market.
Simon Wilkinson commented, We have seen a new phenomenon of house price segmentation during 2009, whereby price growth for certain types of property, moves at a different rate. This has been created through an oversupply of one and two bedroom flats in the market and accordingly the market for them remains relatively depressed whereas for a traditional three bedroom semi-detached house in a good location demand remains very strong and prices have increased sharply.
New technology, with businesses like Google changing the way buyers and sellers access property details, through gadgets like the iPhone may also influence the market. It is also now easy to see The Land Registry data on sold prices and visual information like Street View technology and Google Earth all make access to information immediate.
The outlook for 2010 therefore remains much the same, with modest house price inflation generally, but with prospect of double digit inflation for popular property.
This inflation is being driven by a significantly restricted choice of property being available for sale. Many agents are typically 50% down on normal stock levels, whilst 50% of all new buyer registrations at The Wilkinson Partnership offices are from buyers that can proceed immediately. Usually in a normal market that figure is some 20-25%.
This is also against a background of many homeowners deciding to stay put due to several factors including job worries, the ability to get a new mortgage on similar multiples of income to their existing loan and the maintenance of lifestyles i.e. holidays or the preference to repay credit card bills or overpay their monthly mortgage and reduce their indebtedness.
Local factors all have their part to play, the new A5-M1 link road with a new junction 11a will have a strong effect on most properties around Leighton Buzzard with Commuters being able to cut journey times to Luton Airport and London. For Milton Keynes and Winslow, the proposed East West rail link between Milton Keynes and Oxford will undoubtedly have a positive bearing for prices in North Bucks.
With a mobile labour force and new employers relocating to the area, like Network Rails new complex in CMK there is every reason to hope that we are over the worst in job loss terms. Demand for excellent schools also continues to bring more buyers into Buckinghamshire, with the credit crunch this demand has increased significantly as parents cut back on school fees.
It is now generally accepted that we live in a global economy, where technology and the speed of communication means that change happens faster than ever before, all the more why bricks and mortar will remain popular.