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Helpful Advice

Market Update - October

Market Update - October

By Justin Burns

Recent reports from the National Association of Estate Agents show that demand to buy a property continues to outstrip the supply.

Despite plans to reduce the tax benefits to landlords on buy to let mortgages, demand is such that lenders see this as very secure lending and there is a huge selection of attractively priced deals available for buy to let investment.

First time buyers are returning to the market in significant numbers and taking advantage of the many attractively priced fixed rate mortgage deals available.

The Bank of England, having indicated that interest rates were likely to go up before the end of 2015 is now indicating that any increase is further away and with the UK inflation rate at around zero and wages rising, those in employment are generally in a financial position to spend more than in recent years.

So the demand side of the property economy is strong. The picture is not so strong in terms of supply.

House building, whilst still at levels way below those required, is slowly increasing but this takes time to filter into the market due to the lead times of planning and construction.

In the second hand market we are seeing a slight hiatus develop with potential sellers holding back from listing their property as they are not seeing sufficient property coming to the market to purchase. Of course, the ironic thing is that if everyone who is planning to move did put their property on the market before finding a purchase, this slight “log jam” would clear and the market would operate as most people would like to see it, freely and with a reasonable choice. It would also act to dampen down excessive price increases which, in reality, only benefit the few and not the many.

With an ageing population there is a growing demand for smaller accommodation. It would be benefic ial for many in this sector of the population to be able to downsize more easily. This in turn would free up larger family accommodation for those seeking to trade up.

The debate over Government intervention in the market is always lively but we currently have Help 2 Buy and a different tax regime in the buy to let sector, so would tax breaks in another part of the market be seen as a step too far?

Whilst we ponder possible solutions to the aspects of the market that need improvement, the fact is that the market is basically strong and now is a good time to transact and take advantage of the low cost financing arrangements available.

If you are thinking of buying or selling, letting or renting, please come and talk to our highly experienced team at Peter Barry, in confidence, and maximise a successful move.