Property stocks in most of the UK peaked in October this year as people tried to sell before Christmas, according to new research.
Levels then started to decrease in November but are expected to increase again next year although they have remained relatively level in central London, says a report from estate agents Winkworth.
‘We have seen an increase in new properties to the market which we are confident will carry on into 2010, particularly if mortgages ease and interest rates become more competitive,’ said Ian Dickson, of Winkworth Hammersmith and Shepherds Bush.
Competition for property is expected to remain so in central London which has always been a coveted area to buy in and prices here are recovering quickly, the report also says. The market has been helped during the downturn by foreign buyers, keen to own property in London and to take advantage of the comparative weakness of the pound.
The reported return of bonus buyers to the market will further exacerbate competition for property in Central London. ‘Buyers not linked to the financial sector are anxious to purchase before early next year when the bonus buyers will return. The financial sector now represents 15 to 20% of general enquiries in our office, compared to 5 to 10 % in August this year. In what is now a seller’s market, the return of bonus buyers next year could make the already stiff competition for property even more pronounced,’ said James Moran of Winkworth South Kensington.
It is also anticipated that interest rates will rise next year, which could encourage more home owners to sell. ‘I think interest rates are one of the factors keeping stock levels low. Would you move if you had a tracker at 1% and the best deal you could get on a new mortgage was 5%?’ said Dickson.
However, the general election could also affect people’s confidence and consequently stock levels. There has recently been a lot of talk about an early election in March rather than May. ‘Historically, a month or so prior to an election people sit and wait to see what happens. As a consequence, we may struggle during the normally busy spring period,’ explained Dickson.
‘However, I would expect to see a wave of optimism sweep over the country after the election unless the new government bring in tough spending cuts or tax increases, which will have a negative effect,’ he added.