Buying and Selling Property in today’s Market - By: Martin Davis2

As we have all seen in recent months, the price of houses in the current UK property market have been in decline. In fact, in the last few months we have seen the price of UK homes falling quite substantially and in January 2009 the value of properties fell by a further 1.3%.Which now makes the total decline percentage at 16.6%.

As you will soon discover when you search online, there is much being written about the economic crisis that we are all currently facing. It is thought that the housing market in the UK will drop even further and sales of properties are not likely to increase for some considerable time yet.

In fact, the Royal Institution of Chartered Surveyors (RICS) in the UK are predicting that in 2009 we will see a further 10% decrease in the number of homes being sold. They are currently reporting that less than one home is being sold each week, which is the worst condition the housing market has faced in the last 30 years.

When it comes to the UK property market, only those sellers who are prepared to accept that their home is worth far less than it was last year are going to benefit. As mentioned; although house values are going to fall another 10% in the coming year. The RICS predicts that sales of homes will begin to pick up once more in 2011.

However, although the market is at this weakened state, there are many people who are still willing to buy. For those who are looking to invest in property this may be the ideal time to do so. With house prices still falling and so many people being faced with homes being repossessed, deals are certainly available.

Within the next year the finance industry expects to see an increase in houses being repossessed. This is as home owners struggle to meet mortgage repayments. They are predicting that in the current UK property market; a further 34,000 homes will be repossessed.

So what are the main reasons why we have seen such a big decrease in the value of properties in the current UK property market?

1. Mortgage companies are far less willing to provide finance to those people who want to purchase a home. This is because many people are unsure whether they will have a job or not and whether repayments for these mortgages can be met.

2. In order to obtain a mortgage, finance companies require the lender to provide a much larger deposit. So for first time buyers, being able to get a mortgage to buy their first home has virtually become impossible.

3. Because people are expecting house prices to fall further, they are unwilling to buy.
4. Although cuts in the banks base rates have helped to reduce how much people’s mortgages cost, this won’t actually help to stop the prices of houses falling further. Even with these cuts, the average cost of a mortgage has not altered that much because 2 or 3 years ago people were remortgaging due to great deals being offered. What many of us do not realise is that over time the banks have been increasing their profit margins.

Above we have looked at the reasons why the UK property market looks the way it does. As we watch the market closely, there certainly seems to be no chance of the problems easing for many homeowners in the coming months. But it isn’t just homeowners who are suffering with this current slump. In recent months there have been many construction workers laid off and many estate agencies closing.

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