By Charles Bycroft of Bycroft estate agents in Great Yarmouth.
If you are thinking of moving house, 2010 is probably going to be as good a time as any. We all know that the market peaked in September 2007 and until the end of 2008 was in a dreadful state with dramatic falls in values and very few transactions actually taking place. Last year has been a much better year despite declining prices but with a much greater feeling of stability. Despite an increase in transactions compared with the previous year the number of house sales was still significantly lower than one would expect in a normal market. So why is 2010 going to be different?
Over any reasonable period of time there are many reasons why people move house. Those range from people buying their first home, needing more accommodation, changing area due to work relocation, downsizing in retirement, or simply wanting a change. The greatly reduced number of transactions over the last couple of years or so has resulted in many people now living in the wrong house. I don’t mean it was the wrong house when they bought it, but due to a change of circumstance it has become the wrong house. As house prices have fallen by 15% – 20% the cost of moving has also fallen and the price bands have tightened up. I believe that as the market continues to stabilise lending institutions will become more confident and whilst they have said they have no money to lend I don’t believe this to be true. I think in 2010 we will see a return to 90 and possibly 95% mortgages being made available which will make life a lot easier for First Time Buyers. I believe it’s likely that interest rates will creep up from their current levels but not to such an extent as to make mortgages prohibitively expensive. When I started in this business in the 1960’s the “mortgage rate” was fixed monthly by the Building Societies Association which was effectively a cartel. All the major lenders sat around the table and agreed what they would charge. At that time the mortgage rate was 8% which seems outrageous when you look at the rates which are available now, so if the average mortgage rate creeps up to 5% in real terms it is still cheap borrowing. So these are a few reasons why I believe that 2010 will be a very good time to make your move. I feel that confidence will return to the market and with the availability of more mortgage funds buying your first home or making a move to a different one should become much easier than it has been of late. Will prices go up? I don’t think so. I believe that market forces will not take us in to the ridiculous environment which existed between 2001 -2007 but we will see stability and reliability without the stupid excesses of the past.
Charles Bycroft is on 01493 844484.