What will happen to property prices in the
next 6-12 months? Ask 10 different people, and you'll get 10 different answers!
The reality is that no-one knows, but that doesn't stop us all speculating.
I speak to local estate agents on a regular
basis regarding market conditions. They are an optimistic bunch by nature, who
always think it's a good idea for me to buy whatever it is they are trying to
sell. At the moment I'm resisting, unless the deal on the table is particularly
good.
The reason for this is the feedback I'm
getting from agents across the board. Currently, the market is being held up by
a real shortage of first time buyers - at the bottom end it's only really
investors that are buying. They tend to be snapping up repossessions which
means that even though these trade at a slight discount, at the moment they end
up getting sold relatively decent money - I know this is the case as I keep
being outbid! There are also an increasing number of properties for sale that
are 'hanging around', and if this trend continues vendors will either need to
1) withdraw the property from the market or 2) reduce the price.
The trigger could be a change in interest
rates. This has been long anticipated, but thus far hasn't happened. If / when
it does, I agree with the suggestion that even a small increase could have a
fairly major impact on the market. Some property owners with mortgages will
genuinely struggle. More will be OK, but will be panicked that rates could rise
further and at that point decide they need to 'get rid' of their property. This
is when property prices could fall, not massively, but enough to make
purchasing interesting.
I sense that other investors are thinking along similar lines. I act for an increasing number of potential purchasers who are ready and able to buy, but for the moment are being quite cautious regarding what they pay. I think this is a sensible approach - if the property you're buying comes at a great price, take it! If you're not sure, don't feel pressured bid higher - if you miss out another will come along.
I remain happy to discuss potential purchases with any investor who's purchasing in Northampton or Rugby. If you've found a property in either area and want a second opinion, please don't hesitate to get in touch.
Richard.
