June Property Market Update
We are still reading on a daily basis as well as hearing from the media the upsurge in property values nationally, primarily focused upon London and Southern Counties. Despite wishing to sound cautious this is not the picture we are seeing in the residential market, certainly in the middle to upper markets in the East Midlands. Our experiences are that property prices have levelled over the last year and are proving considerably more difficult to realise in what appears to be a hardening market place.
In a strong market all property will sell, but in a hardening market buyers become considerably more choosey and anything that resembles a potential issue or problem will steer buyers to other properties, eg road noise. Every buyer imagines their perfect property and in reality one only achieves some 80-90% of ones wishes when purchasing. Again, in a strong market people become less fussy, but based within an area of primarily manufacturing incomes with their own problems and not benefiting from the financial sectors of the south, people are becoming more cautious in how they spend less funds.
The lower end market place is still buoyant, continuing to be fuelled by buy to let investors and those wishing to get on to the property market, but we are of the opinion that in our region the bubble is certainly shrinking not about to burst. We are certainly advising both clients and potential clients that serious consideration needs to be given when putting their property to the market and sensitive pricing that allows for interest at a level that is realistic is now necessary and a property that is overpriced, and there are many examples where this is happening, are beginning to stick remaining unsold and thereafter price reductions are being given. This is the first sign of a changing market and one where in a buyer's perception it is a problem property and therefore possibly one to stay clear of even for the most innocent reasons where it may be completely untarnished but just initially wrongly priced. The mindset of a buyer will wonder if a property has not sold as to what is wrong, what are they missing and therefore the property should only be touched if it can be bought at what can be seen as a bargain. Clearly the vendor will not be prepared to consider such a proposal and as such stalemate is achieved.
To the contrary of the possible doom and gloom that I have mentioned above we are seeing a surge in the agricultural market, similar to that throughout the country with incredibly strong interest from all sectors. This is ranging from both the smaller parcels up to the large farms, rarely with the farm or land being purchased by a true farmer but by people known as lifestyle buyers or those with large capital reserves for investment for appropriate tax reliefs and planning. The majority of our agricultural sales from our Ashby de la Zouch office have been handled confidentially with thousands of acres being both acquired and sold without the need for the market place.
How long this level of investment in agricultural land can continue is open to interpretation with many feeling that agricultural land values in this country are low compared to for example Ireland and Denmark, where considerable investment is coming from, but to the contrary yields are already at an unrealistic level for your traditional investor and with surging prices these yields become even lower.
The next 6-12 months will be an interesting time but we may well see some changes in perception, particularly in the residential market and we all know only too well from previous slumps that once perception believes that the market if falling then this is likely to happen quickly and we will have a stagnation for a period of time.
- Ashby de la Zouch
- 01530 412821
- Banbury
- 01295 271 555
- Knutsford
- 01565 757970
- Market Harborough
- 01858 410 200
- Newark
- 01949 851815
- Southampton
- 02380 883150
- Stafford
- 01785 220 044
- Worcester
- 01905 453275
