As a rule, anyone with something to sell wants to make as much on the deal as possible, and anyone trying to buy something wishes to pay as little as possible; this is hardly surprising. In fact it’s something of a natural law in any financial transaction. It certainly applies to the UK housing market.
Various analysts have done market studies on every aspect of the market, from both the seller’s and the buyer’s perspective, and come up with various conclusions. According to Rightmove, at least half the potential buyers surveyed said house prices were above the ‘fair and reasonable’ mark, but sellers surveyed didn’t agree. At least two-thirds of that group said they were waiting for a ‘sensible’ offer.
Britain’s biggest mortgage lender Halifax noted a one percent rise in average house prices in June, but that’s the asking price; it doesn’t mean buyers are paying it. They predicted that house prices will remain about where they are over the next year and the percentage of ‘sold’ signs will not increase either.
Nationwide’s research indicated that the average UK house price is still closer to five times the amount of average earnings, compared to four times on the long-term average over the past 30 years. However their report also noted a drop of about 0.6 percent in house prices for the month of June, bringing the overall average for the past year down by 1.5 percent.
Overall it seems that sellers with property in less popular areas (London and the South East being the most popular at present) are going to have to lower their expectations if they want to sell their homes.
Buyers face an ongoing credit crunch; even though interest rates are still at record lows the overall job/earnings situation remains fairly gloomy.
Simon Lambert of This is Money notes that at present sellers need to be flexible and buyers need to be aware that they cannot expect any immediate return on their investment, as they might have in the boom years prior to 2008.