Friday 3 September 2010

National Statistics V Local Experience


Recent news reports and building society statistics have suggested house prices have fallen 1.9%, between the end of June and beginning September. At Coast and Country we question the value of such information and believe negative spin relating to the mortgage market is also misleading.




These figures are based on nationally collated figures and do not take into account factors which experienced estate agents are aware of and consider in their marketing. The property market locally has remained buoyant throughout the summer and although the number of viewings has dropped slightly in July and August the quality of buyers has been high and levels of business good. This has resulted in above average sales. Why have viewings been down? School Holidays and summer vacations, just like every other year.



By taking this experience into account and applying a basic market principal of supply and demand, one can easily explain what is a minor fluctuation in the market nationally. This has little relevance in the southwest, a desirable area where people aspire to live. On a national scale slightly fewer buyers have been available for a short period, as stock of property for sale has increased. This process is has tipped the balance slightly in favour of buyers, who have on average saved around £3000. Sounds a lot, but when factor in sales where prices are in the millions and price fluctuations my have been very large, the effect on everyday properties in minimised. You are probably talking a few hundred pounds on an average home in most cases this is insignificant.



Other reports have suggested that the mortgage is “tight” and overall the amount lent out buy lenders is only increasing slowly. Here again if you dig a little deeper there is positive news. Many people in a position to do so are reducing their mortgages. This is because investment returns are considerably lower than mortgage rates and it makes sense to do so. However the total amount on loan is still rising, this means a far amount of lending must be going on. Less positive is the time it’s is taking to obtain loans currently and the strict criteria. Difficulties can often be minimised by taking good advice from independent professionals.



Looking further forward into September, where will the market be? We expect levels of viewings to peak through September and October and levels of sales to be high, with numerous pre Christmas completions. We are gearing up for the surge with more advertising and are actively seeking further instructions. Year to date we have been the top selling agent in TQ12 according to Vizzihomes and have sold stc, over 22% more properties than any other office. We expect this margin to increase during the latter part of the year as we simply do more advertising and promotion our clients homes compared with our competitors.