|
Author: Richard Green Article source: http://www.opentopia.com/. Used with author's permission.
Property website Rightmove has released its latest house price index announcing a "Summer sale" for house buyers. The report shows that on average, house prices fell by 1% over the four weeks leading up to 9th July, indicating that the "affordability gap" between house prices and buyers ability to purchase, is at last starting to close. The price fall has been heralded as a great boost for house buyers and an indication that the fears of an expected imminent price crash may be premature.
The statistics show that the asking price demanded by sellers over the report period fell by an average of £1,993 implying that; "Sellers are now realising they have to compromise some degree of their gains in order to sell their properties," said Miles Shipside, Commercial Director of Rightmove.
The Rightmove conclusions correspond with other reports from Halifax and the Nationwide Building Society. Halifax reported that annual house price inflation had fallen behind average earnings growth for the first time since 2001.
The new figures have lead to UK firms becoming more optimistic about the economy than they were three months ago, with companies such as Lloyds TSB expecting interest rates to be cut next month, leading to a general increase in economic confidence. However indicators show that there is a long way to go to attract many first-time-buyers (FTB).
Figures, based on mortgage value requests, released by financial comparison site Moneynet prior to last months slow down, gave the average value of a property purchase for an FTB as £206,250, up from £194,961 two months earlier, a massive jump which could not possibly have been matched by equivalent wage increases. The recent slight price drop follows a long period of huge price increases, and with house price inflation a year ago topping 18%, equivalent to an average of £29,991, it may be some time before many FTBs feel able to enter the market. A recent survey by Abbey highlights the trepidation felt by FTBs with just over a third indicating that they wanted to buy a home within the next year, but only 5% of these were actually confident that they would be able to.
National Savings and Investments (NS&I) Senior Savings Strategist Dax Harkins said: "Despite a recent cooling house market, house prices have continued to outstrip both savings rates and incomes over the last year which means potential first-time buyers need to start saving sooner and harder to get into the market."
Rightmove believes the housing market is in for a summer where competing sellers are more likely to be flexible on prices, further improving the situation for buyers. They postulate that sellers and estate agents appear to have been brought to their senses by a painful 12 months and have belatedly taken matters into their own hands by reducing prices to a level at which increasing numbers of buyers are able to proceed. The report sounds a note of caution however, stating that, "Rises in interest rates or sellers over-optimistic expectations on price could choke off any recovery however."
Speculation on what is in store following the summer lull remains sceptical. The Halifax predicts house prices will fall in 2005, while independent financial adviser, Julian Crooks believes, "There does seem to be a danger of negative equity so people should be preparing their finances to cope."
"Sellers are having to work really hard to attract buyers at present," says Richard Donnell, spokesman for estate agent FPD Savills, "there are a lot of aspirational sellers out there, who still hark back to the hot market. They need to ask their estate agent to give them a realistic valuation and ask them how they can improve their chances of a sale."
Rightmove has warned that the housing market could remain static for several years whilst it waits for the incomes of FTBs to catch up with the housing prices. Miles Shipside, Commercial Director of Rightmove, said "As many sellers are refusing to part with gains they have made, buyers are forced to make up the affordability gap…The reality is it will take seven years of static house prices and wage inflation to bridge this affordability gap."
The market appears to be in a state of change with sellers more open to negotiation than previously, but many buyers, especially the critical first timers remain wary or still find themselves priced out of the market.
Note:
The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. References:
Rightmove House Price Index
Moneynet mortgage comparisons
Richard works in Edinburgh for a media company, occasionally writing for the personal finance blog Cashzilla, and drinking too much coffee.
Where Should I Network?
Networking builds your business on relationships.
A Marriage of Romance: Sexy Suggestions to Spice Up Any Relationship
If you're a husband or a wife, you'll want to take a look at these suggestions for couples who want to heat things up from the kitchen to the bedroom.
Horizon Treadmill Designed for User Comfort
Horizon treadmills are one of the top brands sold in the market today. Horizon treadmills are definitely affordable, so if users are looking for something that'...
Protecting Your Computer From Viruses
If you are on the Internet you are open to intrusions to your computer that you may and often do not want. I wrote this to help protect yourself from these unw...
Joint Venture: 50 Power Secrets Of Joint Venture Marketing, Exposed
What is a Joint Venture?
How To Negotiate A Higher Price For Your House
Negotiation is where many FSBO home sellers really have problems. The wrong attitude or a slip of the tongue could cost you thousands. Here are a few pointers t...
New Jersey Real Estate – The Garden State
New Jersey is often miscast as a less than nice place to live, when the truth is the garden state motto is accurate. New Jersey real estate prices reflect Atlan...
Marriage Tips: Breathe Your Way to a Happier Marriage
One way to increase your chances of enjoying a happy marriage is to remember to breathe deeply. Does this sound strange? That's because breathing isn't usually ...
7 Sales Skills to Improve On
Article discusses 7 important sales skills that sales professionals can improve upon to increase their sales.
Five Tips for Breaking Free of The Drama Habit and Developing a Healthier Arguing Style
We all feel angry from time to time, but feeling angry and acting like a raging, out-of-control child during moments of anger are two very different things. Wh...
Keeping it Simple this Season
It's back. The holiday season and all the challenges that come with it! This is the time when we are most tempted to overdo things - shopping, partying, spendin...
Inspiring Values of Unforgettable Teachers
All of us recall special teachers - people who not only taught us but inspired us in ways that changed our lives. Here are five life-changing values inspired by...
Becoming A Website Designer
The ability to create simple, attractive and functional web pages is a highly marketable skill. Here's a quick, low-cost way to get started...
The Friend Who Taught Me
My Friend has a 13 year old blind, deaf child. It's amazing to me the difference between a grouchy woman who allows Game Cube to baby sit their children all day...
Shih Tzu - Is The Food You Feed Causing Health Problems?
One method of determining whether the food you feed your shih tzu is affecting its health or producing problem symptoms is to keep a health journal.
Foam Pillows are Changing the way the World Sleeps
For countless people worldwide, getting a good night's sleep on a regular basis is an elusive, if not almost impossible, goal. The causes for this malady are n...
Coping With Stress- 3 Simple Steps
Discover 3 simple steps that will allow you to cope with stress by attacking and conquering deadly killer stress.
Beach Wedding Challenges
Beach weddings are romantic and beautiful, and by keeping a few things in mind when preparing for your beach wedding it will surely be the most perfect day of y...
How to Choose a Lighthouse Mailbox
Lighthouse mailboxes can come in a variety of looks and
styles. Most are a mailbox in the shape of a lighthouse.
These come in various colors. Many are hand pai...
Financial Aid - When Should I Apply For?
Many different types of financial aid are available to you in the form of scholarships, grants, and loans. With billions of dollars at stake, it is important to...
Five Simple Steps to Your First eBay Sale!
How to get your first sale onto eBay in five easy steps.
Turn Your eBay Experience Into Even More Profit
Are you using eBay to it's maximum potential. Do people turn to you for advice on eBay...
10 Questions: Do You Have What It Takes?
Do you have what it takes to be really successful? Have you ever thought about what you must be prepared to endure and do in order to be successful in business ...
Mid-Year Success Check: Are You Halfway There?
With 2005 about half over, it's probably a good time to check in with your New Year's Resolutions. If you're having more frustrations than results, check out t...
|
Print this page