Many potential sellers have been delaying putting their properties on the market for fear of receiving a lower than expected valuation, unaware that there has been some price stabilisation and recovery in activity. In recent weeks a healthy number of buyers including frustrated savers and parents buying for children, have returned to the market. This, combined with a shortage of stock for sale, has resulted in fierce competition for quality properties.
A one-bedroom flat in Shad Thames was valued at £345,000 in February, with an expected sale price of £330,000, but the seller, unable to find a property himself, waited until last week before putting it on the market with Cluttons at the higher price of £360,000. Competition between three bidders resulted in the property selling for the asking price within 24 hours.
James Hyman, Partner for Residential Sales, said: "The market has improved considerably throughout April with demand in Central London exceeding current stock levels, as the banks are offering more flexible loan to values and buyers are using their non-interest earning savings to invest in property. However, there is little choice out there, resulting in competition which has driven a stabilisation of prices. We are now seeing prices only 15% below the August 2007 peak, as opposed to 28 - 35% off the peak at second half of last year.
“Now is a fantastic opportunity for sellers to benefit from the shortage of stock and achieve a quick sale. Buyers are keen to take advantage of low long term fixed rates currently available, before the market begins to slow again in the second half of the year when interest rates and unemployment are expected to rise. Homeowners will also start to feel the pinch on their budgets as they relinquish low tracker rates and higher earners start to build in the greater tax burden announced in the Budget, which will affect their ability to borrow."