It has been reported across the country that more houses are being put up for sale than ever before this year, which is welcome news after house sales figures looking pretty glum for some time.
Many buyers have been demonstrating a growing interest in viewing properties, but they are holding back due to a lack of mortgage finance available at competitive rates. April’s sudden good weather added to the increase in viewings completed, however only wealthy buyers with available capital able to put down a sizeable deposit are likely to be able to capitalise from the current low prices on the market.
The lack of activity is therefore stalling any housing market recovery and experts do not believe this is likely to change any time soon. Whilst Michael Newey from RICS believes that ‘the return of sellers to the market is positive’ other factors are holding back any significant recovery.
A research survey from Rightmove.co.uk, showed that over 60% of people believe that the value of properties will either remain unchanged or increase over the next year or so, which shows that the consensus opinion is that property prices will at least not fall in the near future.
This optimism of property prices is welcome and extremely exciting news after several years of dropping property values, inability to obtain finance and houses sat on the market for months and months without any interest or hope of a sale.
The poll also asked whether people believed that properties were currently undervalued, with over 40% of people answering yes. Of course, this may explain while, although there is more activity in terms of houses being put on the market, it is still nothing like the numbers that we saw before the financial crisis.
Most lenders are still only interested in assisting buyers who have at least a 20% deposit to put down for a mortgage contract, so many potential buyers are still finding it difficult to buy a new home. It is no longer possible to obtain a 100% mortgage, and if you do find a deal on 100%, it is likely to be very expensive indeed.
Rightmove also discovered that the 45% of people who planned to purchase property hoped that properties were currently overvalued. RightMove’s House Price Index showed that unsold stock in the hands of estate agents took its “highest jump in four years”. No doubt the asking price of the houses is probably the reason for the surplus stock, which tends to suggest that whilst prices might not continue to fall, sales are unlikely to revive.
If you cannot reduce your property price in order to sell your home then an alternative could be to look at remortgage deals to reduce your repayments. You can delay the sale of your home for a year or two until the property market starts to recover and benefit from lower mortgage repayments in the meantime.
Reducing your repayments will allow you to put aside extra cash. With property prices unlikely to fall much below their current level, you could find yourself in a much more advantageous position in a couple of years when you decide to move house.
James writes for Just Remortgages one of the UK’s top sites for the latest remortgage rates and remortgage deals
