Housing Market Outlook: Poor
The housing market fluctuates and is influenced by many external factors. You can’t accurately predict market movements but if you want to buy or sell a house it should be based on informed decisions.The following are key indicators* of the health of the housing market:
House Price Index Halifax -2.2%
House Price Index Nationwide -1.4%
Interest Rates 3%
Quick Move FTI 39%
Inflation 4.5%
Economic Growth -0.5%
Unemployment 1.82 million
*Information compiled from various sources. Quick Move Now takes no responsibility for its accuracy. Last updated 20/11/2008
Unfortunately the housing market is going through a very difficult period. The credit crunch has had a devastating impact and we are now entering what could be a severe and prolonged recession.
What the stats tell us:
- House price indices are showing continued monthly falls in house prices. With the average price of a £170,000 house falling £3,500 a month, prices are now over 14% lower than a year ago.
- The credit crunch has meant that banks have reduced mortgage availability. Lenders require deposits of 15%+ for the best deals and won’t touch anyone with dubious credit history.
- Increased repossessions. As well as the obvious impact on the home owner, selling on of repossessions further distorts the market and drags prices down.
- Aborted chains - the Quick Move Fall Through Index shows around 40% of sales abort before completion. Well over historic levels.
- Unemployment is rising and expected to top 3 million in 2009. As jobless numbers increase and those in work find wages and bonuses squeezed, fewer people want the financial commitment of buying a home.
- Negative economic growth for the first time in 16 years. It is now widely accepted that we are at the start of a deep recession.
- Good news is that inflation should fall rapidly. This will enable the Bank of England to reduce interest rates further to try and invigorate the economy.
It now looks like the UK is well and truly in recession. Few areas of the economy will avoid the slowdown and historically the housing market is hit harder than most.
As the recession bites consumer spending will be reigned in. At the same time the continuing credit crisis will mean further tightening of the mortgage market.
With money tight and employment uncertain demand from house buyers will fall. Leading to lower sales volumes and prices as home sellers compete hard for buyers.
Most agree that the housing market and wider economy will slide into a prolonged period of recession the only argument is about how long it will last.
This is likely to be a global recession caused and prolonged by lack of confidence in financial markets. Until confidence returns to financial markets and bricks and mortar we are unlikely to see a recovery in the housing market or UK economy.
What should you do?
The advice you will receive is to stay where you are, keep working hard, reduce outgoings and keep up mortgage payments.
However the reality is that circumstances change. Families grow, people fall ill, get made redundant or an opportunity arises in property or business. In short whatever is happening in the wider market some people have to sell their home.
So happens if you do need to sell your home?
Be Realistic
If you need to sell your house, be realistic from day one. Setting your asking price too high will discourage interest and you may fail to sell your home and see its value plummet.
E.G. If prices continue to fall at 2% per month:
A house worth £400,000 now could be worth £300,000 in 12 months!
A house worth £170,000 now could be worth £130,000 in 12 months!
Sell Your House Quickly
The best option is to sell your house quickly. This meets your immediate need and enables a quick house sale to release equity or buy a new home. It is also means you cash in your property at its current value rather than letting its value continue to erode as the market falls.
Unfortunately quick house sales are very difficult to achieve in the current market. Even at realistic prices buyers struggle to secure mortgages and/or sell their own homes and so can’t get in a position to buy your home. This is where Quick Move Now can help.
Who are Quick Move Now?
Quick Move is the UK’s leading home buyer. We buy your house for cash ensuring a quick, secure and efficient house sale. Operating since 1998 and having bought over 2,500 properties Quick Move is the largest and most respected company in the field. If you wish to learn more about the company visit About Us and read our Ethical Charter.
If you would like to discuss our service further contact us or complete an online form to receive an online estimate of our likely offer level.
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