Propertyfinder.com has tracked monthly expectations for house prices for the past four years, and the results have proven to have around an 80% correlation with land registry transaction volumes. This pick up in 12 month expectations for house prices indicates that transactions can be expected to follow suit in two to three months' time, they say.
Nicholas Leeming, director of propertyfinder.com, commented: "There are certainly some signs of hope returning to the property market, albeit from the lowest point on record. There are still huge obstacles ahead and we are a long way off complete market recovery, but estate agents are reporting a big increase in buyer interest since the beginning of the year, a fact that is reflected in the number of people contacting estate agents through our site about properties to buy."
Thirty per cent of people now say that they are more likely to buy property than they were three months ago, among first time buyers this number rockets to 56%.
Nicholas Leeming continued: "A large proportion of the pent up demand for homes is coming from first time buyers desperate to get on the ladder while house prices are down. It’s now cheaper to buy than rent in around 50% of the country, but only for those with a relatively large deposit of at least 15%. For those with bigger deposits who can get lower mortgage rates, it is cheaper to buy in almost every part of the country, but many first time buyers don't realise quite what a large deposit they need to get on the ladder and find themselves shut out of the market by mortgage lenders."
Despite a pick up in demand and a possible floor under transactions in the next three months, the market continues to be impacted by lack of mortgage availability, rising unemployment and poor economic conditions - so prices will take some time to follow. But sellers still refuse to lower their price expectations and the proportion of stock on the market for more than six months is rising.
Nicholas Leeming concludes: "Reasonably priced property is being snapped up. There are reports of gazumping and sealed bids coming back to the market, despite it being so slow in many areas. But many sellers are still refusing to lower price expectations and buyers are simply not prepared to offer full whack they are only interested in bargains. Once property has been on the market for more than six months it becomes stale and harder to sell and the reduction in price necessary to get an offer will be greater."
