Green shoots but will they flower
It’s clear some areas are now returning to good performing local markets, while many are stagnant or even continuing to fall in price. Regionally, the picture varies dramatically, so it is still a postcode lottery as to whether now is a good time to carry out your property project and understanding how to evaluate your own local market is research you will need to undertake yourself before making your decision.
Is it a good time to sell?
At the moment, this could be a good time to sell your home – depending on your postcode/property type. If you are in the East Midlands it’s still taking on average three months to sell, so that’s six months before you can move.
In contrast, in London, it’s down to four weeks to sell, so that’s just three to four months to pack up and move. Talking to contacts in the London market, some areas are completely starved of stock to sell, so it may be easy to sell, but tough to find a new home. However, worth negotiating a deal on estate agency fees even with the best agents.
Is it good time to buy?
While prices are reported as ‘going up’ it’s always tougher to buy a property as it’s likely sellers will hold off agreeing a deal until they really feel they have the best offer.
In areas where the property market is still in the doldrums, it’s critical to work out whether it’s hit rock bottom, for example prices have been steady for the last few years, or as in some towns and cities, are still falling. Bear in mind as a first time buyer you can’t lose money on your first home, so you don’t really want to buy if prices may fall further, so it’s better to wait for a flat or slightly rising market to buy.
Take your time and don’t rush into a deal. Too many first time buyers rushed into buying to save Stamp Duty in 2012, and as a result, ended up paying more for the property than money saved on Stamp Duty.
Is it a good time to invest?
Investing in property at this current time is fascinating, but it’s hard work. Even in areas where property prices are falling it can still be difficult to find a deal which will stack up for the short and long term.
Typically, areas are dividing into two returns. They are either good places for capital growth, with income returns of sub 7% or are great areas for income returns (+7%). Be warned, capital growth needs to be forced from the start as these areas are typically not generating any natural capital growth.
Is now a good time to renovate or build?
If you are looking at renovating for profit, this is tough in the current environment, especially in an area where prices are falling as you are ‘up against the clock’ to turn the property around without too much been wiped off the value.
However, if you are looking to build, small and medium sized developers are still struggling to secure funding, so plots are easier to secure and can be up to 20% below the value they were sold at pre the property crash. As building tends to add approximately 30% capital value, and if you are looking at staying or building the home to let, now is a great time to consider building a home of your own. You can even secure support from the Government!
Read the Full Consumer Property Market Reports for May here, including:-
- Regional and national averages
- City Centre property price performance varies by 30%
- So is now a good time to buy, sell, invest, build or are you better off renting?
- Supply and demand
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