Home Buyers And Sellers Become Nervous

Home Buyers And Sellers

Home Buyers And Sellers: The difficulty, many individuals are presently having in both buying and consequently selling their homes, is now beginning to put added pressure on household budgets. This is reflected in the number of house buyers on Estate Agents books, which has fallen 12 per cent last month according to figures released by the National Association of Estate Agent (NAEA). The findings of the report, confirms the shrinkage in the number of first-time buyers seeking homes.

 

Home Buyers And Sellers: Despite a growing demand for fixed rate mortgages, competitive deals are becoming increasingly hard to come by. Lenders suffering their own fallout from the credit crunch are now beginning to find it increasingly difficult to source funding. This situation is now fast putting further pressure on the number of mortgage products available to the consumer, leading to a tightening and contraction of the lending industry.

 

In another survey by Moneyfacts, the number of mortgages available to sub prime borrowers has dropped considerably, since the credit crisis broke last summer 2007. The number has fallen from 6,501 (from 32 lenders) to 1,867 (currently available from 20 lenders) today. This is confirmation that some mortgage providers have scrapped them altogether.

 

Julia Harris, a mortgage analyst from moneyfacts said, “Investment banks have been hit hard by the troubles facing the US sub prime market and therefore are less willing or able to securitize the mortgage books of UK sub prime lenders.”

 

Homeowners wishing to sell up are helping to slow the market, by listing their properties with prices that are just not viable. According to the latest House Price Index from Rightmove, sellers are coming to the market and ignoring the increased competition from other unsold properties, and the challenge buyers now face in obtaining a mortgage.

 

The number of properties available to sell this spring is 85 per cent greater than a year ago. Therefore it is now concluded ‘a seller’s market has been replaced very quickly by a buyer’s market.’ We know what a seller’s market looks like- several buyers for each property, bidding up the price and usually resulting in a sealed bid at a level way over the asking price. A buyer’s market is one where each buyer has a multitude of offers on several different properties, all at prices that he/she is comfortable to pay. These as now become reality in spring 2008.

 

This climate has made it increasingly difficult for first-time buyers to get a foot on the ladder. At the start of 2008, the numbers thinking of buying their first property had fallen dramatically, with some still having an inclination of battling on through the storm. We can safely say that ‘the rug as been pulled from underneath their feet’ by lenders now turning their back on this market sector. Many first-time buyers will have no other option, except to delay buying until the housing market corrects itself and stabilises in the short-to-medium term. However, those whom are privileged and able to push-on will now be in a strong position to receive attractive big discounts in the market place.

Since Easter, we have begun to see house builders and developers cut house prices, in an attempt to clear slow moving stocks. First-time buyers are being aggressively targeted with packages which include:-

 

  • Deposits paid
  • Legal fees paid
  • Stamp Duty paid
  • Survey fees paid
  • Incentives worth thousands of pounds given
  • Property prices reduced significantly (in some cases by £35,000)

 

In the words of UK former Prime Minister, Margaret Thatcher, ‘Tough times never last, but tough people do.’ Is the attitude with which everyone (home buyer and seller) have to adapt in the forthcoming months,

 

 

Editor: Simon Weston-www.myfirsthomeltd.co.uk

 

Blog: www.myfirsthomeblog.com

 

Email: simon.weston@myfirsthomeltd.com


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