26
Oct
Buy Hold or Sell ?
Ben Hudson of Pink looks into the options presented by the
property market this autumn. Just like the stock market there is a
right time in the property market to buy, hold or sell. But, unlike
the stock market, buying property is usually allied to selling, so
a clear financial advantage is harder to anticipate or achieve.
Despite the turbulence of the past year the market now, against all
odds, is rather good for selling. Here’s why. Figures just
out show that the rental market is reaching some sort of
equilibrium, with the numbers of available properties having
dropped over the past six months or so. This is an important
indicator. It suggests that those owners who couldn’t sell
their homes in the recession, and were thus letting them instead,
have now begun to find buyers. This erosion of inventory in the
rental sector indicates a new dynamic in the sales sector. Over the
course of the year buyers have been snapping up those properties
priced keenly to sell. These bargain seekers have, in the main,
been cash buyers or those with sufficient funds to require only a
small mortgage. Now two things have happened in the market. Cash
buyers are drying up along with the bargains. In many areas prices
have been rising to reflect the paucity of available stock. Will
more property become available over the coming months as
home-owners see more chance of a sale? Would a greater supply of
property for sale suppress, or even reverse, some surprising price
advances of the past few months? These questions are hard to answer
in an economic environment that threatens greater job losses and
higher taxation. We are now in an all-important political party
conference season. Those of us in the property industry and those
whose plans include buying and/or selling property over the coming
months are busy analysing how the policies of an aspiring new
government may affect the property market. Taxing
‘mansion’ owners, repealing Home Information Pack
legislation, and providing more social housing: these are all
suggested new ideas. What good, if any, these measures will have is
difficult to see just now. But the real drivers of the property
market are deaths, births, confidence and taxes. Any incoming
government next year can’t do too much about the first two.
But how they manage the latter pair will be crucial to them and to
us. So what to do now to make the most of this market before the
general election and even Christmas? Why, sell of course. But if
there is a property to buy as well it really does not matter too
much in the financial scheme of things. What surely does matter is
that you and your family are happy and safe in the home you have or
the home you buy. These are always the best reasons to determine
whether to buy, hold or sell and no market or political party,
whatever their policies, will ever change that.