‘Vicious circle’ threatening to cause property gridlock
it found that 89 per cent of people said finding their next home is harder than selling their existing
it found that 89 per cent of people said finding their next home is harder than selling their existing one and almost 50 per cent don’t plan to put their own home on the market unless they have seen another they would like to buy or their search reveals there are lots of possibilities.
“In high-demand areas this is starting to cause a property gridlock,’ said an agent at Romans’ Hart Street branch. “With the supply of homes for sale low and demand remaining strong, prices are being pushed up — textbook economic law of supply and demand — resulting in more concerns for homeowners who are sceptical about the marketplace, and delaying their move further.
“For many, once they’ve decided to move, the biggest challenge is finding their next home and they don’t feel comfortable about putting their house on the market until they do.
“However, it’s a vicious circle, as homeowners are not putting their houses on the market because they are concerned by the lack of stock available and affordability of making a move, which in turn pushes prices up even more.’ At the upper end of the scale house prices are also rising, with more detached properties selling than any other property type in most of the areas Romans covers.
This is partly down to the ripple effect generated by London’s property market, which is resulting in many house buyers leaving the capital for its surrounding regions in search of more cost-effective property.
And yet, as we’ve already said, according to the RICS annual housing market forecast, local house prices are still set to increase more than the national average.
According to a recent poll by Romans, many house hunters were expecting the rises anyway, with 75 per cent expecting house prices will rise in 2016 — slightly less than the same poll 12 months earlier, when 89 per cent predicted house prices would rise in 2015.
Vincent Courtney of Romans said: “The fact that prices will continue to rise in 2016 is no secret. There is simply no good reason why they wouldn’t: demand from buyers is stronger than ever, there isn’t enough supply to satisfy the demand, and there are nowhere near enough new-builds. But how much will they rise by? I believe house prices will rise by five to 10 per cent in most of the towns we cover and the increases will predominantly be seen in the first half of the year.’
Philip Booth of Philip Booth Esq says: “I think 2015 has been a challenging year for many estate agents, particularly those that rely on volume sales, as the numbers just haven’t been there. I am fortunate that as a small independent estate agent I don’t have the pressure that some of my peers with high overheads are experiencing.
“The reduction in the number of homes coming to the market in Henley has also had a knock-on effect with asking prices, which have continued to go up.
“With a plethora of estate agents in the town all vying for instructions in a market that has seen lower stock levels, naturally some agents have bought stock by giving high values.
“This has led to some properties sitting on the market for many months or being reduced by tens of thousands of pounds to meet the demands of financially savvy house buyers.’
Mr Booth predicts that as the year rolls out the housing market in general will be more steady, with the number of transactions increasing against 2015 figures.
He said: “Family homes in Henley between £500,000 and £1million will continue to receive strong demand from local upsizers and London buyers.’
Edward Welton, a partner in the country department at Knight Frank, made his own prediction for the prime market: “With changes to stamp duty coming into play in April, affecting second homes, we see the first quarter of this year being a busy time at the top end of the market.’