An interesting indicator for the market this year so far is that we have noted around 20% fewer valuations in the market place for the corresponding period of last year. This has a direct impact on the number of properties becoming available as the conversion rate from valuations to houses entering the market have remained relatively stable over the years.
So on the one hand we have pessimistic news about the economy, public sector job cuts, etc., etc, and on the other hand we do not have an over supply of property, putting really hard pressure on values.
Having said that, values do need to be right; we are finding that where we are quoting within 1 – 3 percentage points of the actual sale price then sales are being agreed relatively quickly. Where we are trying to be more ambitious and prices are sometimes quoted at around 5 – 10% in excess of the their true value, unless there is something particularly special or individual about the property, it normally means the property, although perhaps attracting viewings, does not actually secure an offer.
The market place is currently controlled by interest rates in that vendors who normally would consider having to sell are able to hold on and defer any decision making, again cutting off the supply of property coming to the market. Interest rates, of course, are favourable to buyers but, unfortunately, and particularly for first time buyers, the money is not readily available and large deposits of around 15 – 20% are required, which is often out of people’s range.
This means that we are currently operating in almost a ‘stalemate’ type of market place where both buyers and sellers are viewing each other waiting to see who jumps first hence the inconsistency in activity levels.
Ed Mackenzie Smith