Your hopes for the property market, and what you look to do next, will likely impact on your current view of what is happening. You will see some opinions stating that the property market is sluggish or slow, perhaps not performing as well as they would have liked. It is fair to say that property prices have slowed down in the UK of late, which is not great news if you were looking to sell your home for a hefty sum of money but if you were looking to buy property, a slower rate of growth could be of benefit.
In fact, there is an argument that modest growth in property prices is better for the market because it can help buyers and sellers to feel confident in what they do next.
Modest growth doesn’t deter prospective buyers
Even though the level of demand for homes outstrips the level of supply, fluctuations can still occur in the buyer market. If house prices are tipped to rise sharply in the foreseeable future, some buyers will move their buying plans forward to buy now before the prices rocket. Conversely, if house prices are tipped to fall in the foreseeable future, a savvy buyer may decide to delay their purchase in the hope of saving money later.
However, with a modest growth of house prices tipped, buyers have a level of confidence in their purchase. While a buyer wants to purchase at a low price, they then want their home to increase in value. Once a buyer becomes a homeowner, their aims and hopes for the property value and price switch, which is why having a modest level of growth with respect to prices is the best option for the overall needs that a buyer has when they act in the market.
Modest growth provides vendors with confidence
One of the biggest issues in the property market comes with the lack of supply in the housing market. If homeowners are not selling their homes, it is difficult for buyers to find suitable homes. While some people will think this should lead to an increase in property prices, relying on the traditional supply and demand relationship, the fact that there are so many influencing factors on the market can limit the growth of property prices.
However, if homeowners see that there is modest growth in house prices, they may decide that now is as good a time as any to prepare their home. If property pricing predictions tipped a looming fall, homeowners would rush to sell their homes quickly to conclude the deal before the drop occurs. If the property pricing predictions tipped an increase in the future, homeowners would decide to hold off from placing their homes on the market now, hoping to benefit from the expected increase later.
Therefore, modest growth, with lenders feeling optimistic and things moving in the right direction, will help persuade homeowners that now is as good a time as any when it comes to selling their home. After all, it is likely that a vendor will then become a buyer of property, so knowing that the market is consistent is likely to create a sense of confidence in making a move.
At Philip Ryan, we are here to ensure you make informed decisions and that you are happy with your property market decisions. If you would like any guidance or help with your next property move, please get in touch.