According to recent research by Housesimple.com an average of 12.5 per cent of properties currently on the market have been for sale for six months or longer. Given that we are in a situation where even the government recognises that the UK has a desperate shortage of housing, this percentage seems hard to understand.
Of course, this is an average and there are various reasons why some properties are less attractive to buyers. Location and state of repair are factors, but in reality, not particularly significant in the grander scheme. Even in the City of Westminster, a most desirable location, the percentage of properties on the market for six months or more has reached 22.5 per cent of the total for sale.
The London effect is a phenomenon that skews most average figures when we look at the housing market. The causes for the situation in the capital, where property is usually snapped up, are quite different from the rest of the country. Until recently London has been reliant on overseas investors and landlords to keep the market moving. However, the number of overseas buyers declined in quarter three and the stamp duty regulations for buy-to-let properties has made a real dent in the sector. This should of course free up property for other buyers, but the price of London property makes it prohibitive to most.
Across the country price is of course an issue and, despite all the nervousness surrounding Brexit and our general economic outlook, house prices are still rising in most areas of the UK. However, this may be about to change if the problem of supply and demand is addressed properly and developers are held to account over land-banking. If supply increases house prices may well come down and, in some areas, reach a more realistic level.
Without question, there is a buyer out there for every property. So perhaps the question is more about the chain and putting the right people in a position to find those properties that appear to be harder to sell? If we free up the chain there are consequently more people in a position to get moving and find the property that is right for them.
The government has pledged to build one million new homes by 2020, with the annual target met in 2017. So, if things carry on as they are there will be more new housing coming to market in the next three years than we have seen since the height in 2007/8.
Granted not everyone wants to live in a new house, but for many it can be the best, or only, way to either get onto the property ladder or move up, or down. Finding ways of helping buyers, being creative in the way we approach their needs is the way forward.
For the older generation downsizing into a newly built property, which needs little or no maintenance, is becoming more and more attractive. First-time buyers too can see the benefit of new build for similar reasons, keeping costs down when you buy your first home is vital. An energy efficient, low maintenance home will ensure the bills are kept low.
However, it may seem like a new build home is the answer but sometimes there needs to be more to tempt people. Schemes like part-exchange or assisted move make buying a new build home easier and take the onus of selling a property away, making the process much less stressful and often less expensive. It is also quicker, in many cases exchange of contracts can be achieved within 28 days, with completion to fit build timescales.
For a developer part-exchange not only unlocks sales potential, it takes much of the hassle away, improves cash flow and eliminates the usual housing chains. By freeing up capital they are better placed to fund their next project, bringing more houses to market more quickly.
Freeing up housing stock is the ultimate goal. It may be that one property has been on the market for six months, but the one buyer for that property has also been unable to sell their property. It’s a vicious circle in many cases, but the more people that are moving up and down the chain, the less time it will take to sell each property.
In a time when housing is in short supply, it does seem ridiculous that there are still some properties that take such a long time to sell. It will be interesting to see how the plans announced in the autumn budget pan out, especially when it comes to sites with planning consent. How quickly developers react, and start building where the housing is needed, will be a major factor.