Developers, downsizers and divorcees set to be key influencers for rising property market.
As fears of a second phase ‘Help to Buy’ fuelled housing bubble subside, the supply of fresh property to the market will determine what happens to prices and volume of sale transactions in the coming year.
With little doubt that current high demand will continue to rise, the key influencers for supply are likely to be new homes developers followed closely by the growing number of downsizers and – unfortunately –divorcees, as the economy recovers and those stuck in broken relationships take advantage of the opportunity of increasing property values to pay-off their mortgages and move-on.
Developers have already led the way in 2013 with new homes taking an increased share of property sales, assisted by the first phase of ‘Help to Buy’ and a growing appetite from property owners for easy-to-manage, energy-efficient homes.
As developers strive to meet demand, a growing supply of pre-owned homes will come from the mass of people looking to downsize. With a recent survey by Lloyds Bank quoting that 43% of homeowners plan to sell their property in the next three years as they’d “like to downsize” – 37% said they want to support their retirement plans and 43% want to reduce their bills and outgoings.
And it’s not just a retirement option. The survey indicates the average age of a ‘downsizer’ being just 40 years old..
Unfortunate casualties of the recession are the increasing number of divorcees, or relationship splits, who have struggled through financial turmoil – often only holding onto their joint property as they could not afford to sell it. As prices have increased (around 5% over the last year locally) many will look to sell-up before prices increase further (forecasted to be as much as 25% over the next 5 years) and either party might struggle to get back on the ladder.
You don’t really need 3D specs to see what’s happening, but you do need an agent who isn’t looking through “Rose coloured spectacles” if you want the best advice!