Seanne Ryder, who is a partner at the Home Search Agency, Homes and Herts, has recently seen a lack of new properties hindering Client’s own searches and consequently driving inflation. She says:
‘within certain price brackets, such those around the upper stamp duty thresholds and certain postcodes, we are seeing that very few new properties are coming on the market. This means we are dealing with a three tier market that consists of the good, the bad and the ugly!’
She explains that ‘good’ properties (well priced, premium location) are being snapped up within hours of being released. ‘ The ‘Bad’ properties, which can be characterised as those that are overpriced with owners who are not keen to reduce prices, simply sit and stagnate on the market. The ‘Ugly’ properties, those that are not prime but have owners who are prepared to take offers, will eventually sell but, this is taking significantly longer than during the ‘boom’. Home.co.uk claims that houses were taking an average of 50 days to sell in 2007. That rose to over 150 days during the early months of 2009.
This tier system means that ‘good’ properties are holding value and, in most cases, selling at a premium whilst the ‘ugly’ properties are selling at, sometimes, significant discounts. Hence, despite the general consensus that house prices are falling, there are properties that are enjoying (or suffering from – depending whether you are a buyer or a seller) price inflation. The latest statistics from the Land Registry seem to back this up, with an average monthly increase in property prices of 1.3% across England and Wales in September. The increase is more pronounced in London and the South East. Prices are still falling in areas such as Humberside and Wales.
So, how can you tell whether the property you want is good, bad or ugly? Well, if it is ‘good’, you probably won’t see it at all! Only the most persistent, motivated and suitably placed buyer (cash buyers) or Home Search Agents will ever hear about these gems. A ‘bad’ property can usually be spotted on at least 3 agents’ books, with exterior shots taken at least 2 seasons ago. And the Ugly, well that’s simple – make an offer and see!