The first two months for the year have been pretty busy overall with more new properties coming to the market, giving buyers even more choice. Potential buyers are certainty out viewing in large numbers but are enough of them buying?
Despite sales being up on the same period last year, early data suggests that sales are not as strong as they should be compared to the number of viewings taking place. It seems potential buyers are making lower offers and not increasing and sellers are holding firm with negotiations, hence lower conversion rates.
Why are buyers offers low? The answer appears to be “confidence”.
Prospective buyers are more cautious than this time last year despite three interest rate reductions. Lack of general confidence in the economy is making buyers wary and in turn sellers are trying to hold out for their desired price, particularly if they are intending to buy on again as every penny counts towards the next home. People seem less bullish about borrowing more on mortgage.
We are still experiencing many potential home movers struggling to get a mortgage, despite believing at the outset it would be a formality. Is this down to affordability issues, stricter lender criteria or historic bad credit?
The housing market still has room for improvement, another interest rate reduction will be welcome, this might install more confidence and ease affordability issues. The number of properties available for sale is higher today than this time last year so buyers are being diluted. Rightmove state locally there are 9.7% more properties available now in Northamptonshire than at this point a year ago.
The rental market continues to remain active, however rental price rises have now stabilised as they appear to be at bursting point in terms of affordability and referencing criteria. Landlords are enjoying great returns on their investments but the whole lettings sector has one eye on the Renters Rights Bill due to become statute later this year.
As we move out of winter and into spring we all have to remain optimistic that the number of house viewers turn into actual buyers. The next few months are going to be interesting for both the housing market and the economy.