Estate agents say rise in demand is having an impact
Estate agents say the return of buyers to the property market coupled with a fall in the numbers of properties for sale is causing house prices to start to stabilise.
According to Winkworth, pent-up demand from buyers who have been sitting on the fence has fueled much of the increase in activity in the property market. This in turn has boosted confidence among lenders who are now making more mortgage products available, making it possible for some first-time buyers to get onto the property ladder.
Many local estate agents reported seeing signs of a recovery at the beginning of this year and say that recent industry reports and statistics are several months behind.
Ian Dickson, Franchisee of Winkworth Hammersmith and Shepherd's Bush says: "The amount of genuine, good enquiries has risen by 50% since the end of last year. This is particularly true of first time buyers (with deposits) who have been around in good numbers. First time buyers are off the endangered species list.
"Time and time again we come across new evidence of prices stabilising," he said. "A recent example is a two bedroom flat that we sold in the peak in July 2007 for £405,000. The same property came onto the market this month and an offer was made of £390,000 – only a 4% reduction from the peak price."
Dominic Agace, Managing Director of Winkworth Franchising Ltd says: "In this period of Government intervention and low interest rates, there is a great opportunity for those with 20% equity plus to buy and sell prior to any potential interest rate rises next year, and this is driving much of the demand."
Prime locations appear to be faring even better. Research conducted by Winkworth shows that, on average, prime central London three bedroom houses actually increased in value by 0.04% between September 2008 and June 2009, compared to industry reports which suggest that, on average, UK prices were -3% in April 2009.
Agace says: "Properties in prime locations, i.e. favored streets in particular areas, may experience price growth this year. In these cases competition, driven by buyers looking to take advantage of property discounts and low interest rates, will push prices up due to a lack of alternative suitable properties. Without price growth properties are being held back from the market."
Winkworth say that while this could signal the start of the road to recovery for the housing market, the agency believes the data should be viewed with caution. They say they expect there to be greater activity levels in 2009, equating to an average of 10 to 15% more transactions than in 2008, but that restricted access to mortgages, combined with unemployment figures, will limit price growth this year, except for properties in prime locations which will remain an exception to the norm.
June 15, 2009