publication date: Oct 18, 2013
|
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
Impact of Supply and Demand on Buying and Selling
a Property
Overall, prices certainly seem to be rising in areas where demand is increasing at a faster pace than demand. These are typically areas which are:-
- Economically successful
- Low levels of unemployment
- Property prices are higher than the national average
Good examples include areas such as London, Brighton and Bristol which have average property prices of £350,000; £230,000 and £175,000 respectively.
In contrast, areas such as Nottingham, Sheffield, Bradford and Leeds are still suffering with higher levels of unemployment, lower than average wages and below average property prices, under £125,000.
Although some markets are recovering, it’s easy to forget during these ‘joyous times’ that the market has been in the doldrums for six years – meaning there is lots of pent up demand from both existing owners and first time buyers.
Despite the fact that the Help to Buy Scheme and Funding for Lending Scheme have boosted the market this year, we are still in pretty tough times. Property sales are still only running at 60-70% levels pre the credit crunch, and even in areas where prices are recovering, the number of sales isn’t. This would suggest the boost to the economy from a recovering property market may not be enough to take us out of recession and return the market to ‘normal’ times.
And, it’s still pretty tough to get a mortgage, as the lenders have hopefully learned their lessons from past frivolity. On top of this, many people are still in negative equity and even if they wanted to sell, the likelihood is they couldn’t afford to do so. Also, we have yet to see the impact on the market of interest rates returning to normal 5% levels.
So, the biggest influence on whether now is the right time to buy, sell, invest, renovate, build or rent a home very much depends on what’s happening in your local property market. Whether you are in a fast or slow moving market during these uncertain times, just make sure you take your time and make the right decision for you. Don’t let anyone ‘push’ or ‘rush’ you into buying and selling property.
For more information on the housing market, take a look at my latest property price update - including, what's happening regionally, in the towns and cities and property supply and demand.
