If you are currently looking to purchase a property, you will undoubtedly be keeping a keen eye on house prices in the local area, while also watching what other buyers are doing, because if you time your purchase right you could potentially save thousands of pounds on your acquisition.
The New Year generally tends to be a time when more prospective sellers and buyers come to the market, as reflected by the typical market increase in buying activity at this time of year.
During this period there is typically a larger pool of buyers, meaning competition is increased and buyers have less bargaining power, particularly with those sellers who have already softened on price.
Meanwhile stamp duty changes and Brexit uncertainty have been holding back demand for property, especially at the top end of the market, while the government’s decision to introduce higher taxes for people buying a second home, including buy-to-let property, has also been weighing on the local housing market, placing downward pressure on asking prices.
The latest data from property website Rightmove shows that the asking price of a property in this country newly launched on the market has fallen by 1.1%, or £3,452, over the past month, illustrating the fact that it is currently a buyer’s market.
But even if a property has already been discounted it would be a mistake to assume it is a steal - it may simply have been overpriced in the first place. In fact, despite falling asking prices, actual prices being achieved in many parts of London are still rising, with the latest data from the Office for National Statistics/Land Registry revealing that the capital experienced a monthly rise in September of 1.4%, pushing the average value up to £487,649.
The resilience of the housing market means that while there is currently some room for negotiations on price, this could be short-lived, with confidence among homebuyers having already returned to levels last seen prior to the EU vote, according to the National Association of Estate Agents.
“There are dangers to increasing demand unless this is matched by policies to improve supply,” said Rightmove’s director and housing market analyst, Miles Shipside.
Official figures from the Bank of England also shows that the number of mortgage approvals - a gauge of future housing market activity – has picked up more strongly than expected in recent weeks.
“Housing market sentiment is holding up well, with demand still strong,” said Mohammad Jamei, senior economist at the Council of Mortgage Lenders. “This has led to a pick-up in approvals, as expected.”
Given that very few of London’s first-time homeowners are now trapped in negative equity, those looking to trade up - commonly referred to as second steppers - are in their strongest position since 2009, with rising property values and an increase in first-time buyers making it easier to sell up and move on.
What’s more, the Bank of England’s decision to cut interest rates from 0.5% to 0.25% in August - a record-low and the first cut since 2009 – means that mortgage affordability for first-time buyers and home movers is now at an all-time low.
CML director general Paul Smee said: “Mortgage affordability reached an historic low in September, for both first-time buyers and home movers, which partly reflects the re-pricing of mortgages following last years base rate cut.”
But while mortgage activity is in good health, reflecting growing consumer confidence after the EU referendum, there remains a chronic housing shortage in our area. Consequently, there is every reason to believe that the widening supply-demand imbalance and impressive resilience in the property market will result in further house price growth in 2017, which means that you may even get a better deal if you buy now.
What to look for when buying property and how to get the best deal
Buying a property is likely to be one of the most expensive transactions you ever make, so it’s important to do it right and get the best price.
There are many factors that will determine the price of a home, from demand in the area to any defects it has, but first you need to find the right property.
Finding the right home can be a long and difficult struggle. There are lots of things to consider when house-hunting and it is not always possible to see everything clearly on a first viewing.
There are a number of things to consider when viewing a home, but if your first impression of the property is a good one, arrange a second viewing, and if possible take someone with you for a second opinion.
Here are a few tips on how to secure the best price for your dream home.
Keeping an eye on the market for the future. Sign up for our newsletter and wewill keep you up to date with all that's happening on the market.