If we all get real about prices there are reasons to be cheerful
SO what is happening in the residential property market at present? It is a question that many estate agents are being asked on a daily basis. It might seem a contradiction in terms given the raft of economic data, but actually I am very optimistic about the Yorkshire residential property market this autumn. One word probably sums up the reason for my positive standpoint, namely, realism.
Home owners across the county, who are committed to selling, now accept that asking prices have to be sensible if they are to attract a buyer. The result is an increasing housing stock that is realistically priced. Fortunately, potential purchasers seem to be appreciating this sense of realism given we are certainly experiencing an increasing number of viewings. Indeed, in September, Knight Frank offices across the UK saw a 48 per cent surge in viewing volumes compared with August, with an encouraging 21 per cent increase in new buyer registration over the same period.
So, with an increase in the number of people wanting to buy, and actually carrying out viewings as well, perhaps you can start to understand where my optimism lies. But viewings are one thing, what about actual sales?
Well, again there is good news this autumn. September has seen a 27 per cent increase in the volume of our properties being put under offer in comparison to August, and this almost matches the same period last year. Furthermore, where sales are being agreed, our recent experience shows owners that are adopting sensible asking prices to entice buyers, are actually achieving around 95 per cent of the guide being quoted.
So while times are not easy, market evidence suggests it is not all doom and gloom. Therefore, as a home owner what can you do to make sure you benefit from what appears to be significant pent up intent on the part of both buyers and sellers alike?
Price is, of course, the obvious and probably most important factor. There is no point in quoting a price if it bears no resemblance to similar houses in the area that may have recently sold. A valuer for mortgage purposes will certainly have regard to this evidence which will be readily available on line. But you can’t argue the same point both ways, in which case when buyers make an offer, rather than thinking there must be an automatic discount, they should have regard to the same evidence if they want some form of assurance or peace of mind to the offer they are making.
When a house is perhaps a little more individual, it is perfectly reasonable that an owner might think their house is a little special and therefore justifies a premium price. There is encouraging evidence that where buyers recognise a property as being “better than the norm” they are prepared to pay for the privilege of ownership. Fortunately, the sense of realism I mentioned earlier does seem to suggest that buyers are not simply looking at home ownership as a moneymaking exercise, it is now much more a question of buying a home to live in.
So what I am advocating is realism on the part of buyers and sellers alike. As was mentioned to me earlier this week, surely in the current climate, moving house is like buying a car, only a little more expensive. It is the cost to move, and for most of us this means maintaining the same differential between your sale price and your purchase price. However, for some, maybe the realism of the current market is accepting that the dream house you really wanted is not affordable. So perhaps if you want to move, you should lower your aspirations and buy something that might be a little cheaper, but it could well be equally enticing and prove to be lovely home in years to come.
Realism also relates to acknowledging both the advantages and perhaps disadvantages of a property that you might be looking to sell, or indeed purchase. If it is near a busy road, but in the catchment area for a particular school, if you are selling, price accordingly. Reflect the fact that the road is there but you are perfectly entitled to quote a price because of the school. If you are buying, remember both issues. Again, it is all a question of being realistic, and if this continues then I genuinely think the Yorkshire residential property market could prove to be very active over the next six months.
Tim Waring is a partner in Knight Frank and heads their estate agency team in Yorkshire.