Fruitful times for Vendors and Landlords in 2010

The last ten months have seen rising prices in the sales market. Hamptons International have reported an increase of between 10-15% uplift. In fact, in some cases, they achieved prices beyond the peak of the market in 2007. This is in despite of a lack of properties for sale and the overall stock levels down 27% year on year. This pattern is set to continue during the early part of 2010 with a steady climb until the general election. As always with political elections, the danger of rising interest rates and potential increase in taxation mean that the market will be nervous around this time; however once the election is over it will recuperate quickly.

Rental prices have now stabilised across most areas of the UK which can be partly attributed to the low stocks of property to rent. Essentially the average rental values at the end of 2009 were comparable to the values at the beginning of the year, with only a 0.9% decline. Specifically, in the last three quarters of 2009 they steadily clawed back their value after the dramatic reductions of 2008 and early 2009; Q4 of 2009 was the strongest quarter of the year.

The low stock levels in both the rental and sale markets continue to push prices up and increase competition levels for applicants.  As aforementioned sales stocks are down 27% and rental stocks and at the end of January 2010 were 53% down on the 2008; although there was a small increase versus December’s figures. The low stock levels are undoubtedly the largest test facing the lettings market for 2010 but in differing ways for landlords and tenants.

Hamptons International report an increase of 45% in lettings during January compared to the previous month; this translates to eight applicants registering for every newly available property. Some hardy advice for prospective tenants is to act with pace (and less negotiation) if the right home is found as there will be other tenants waiting to usurp you. Consequently, it would be prudent to be flexible with rental increases due to other waiting applicants. At the other end of the spectrum, landlords will be in a good position to rent their properties quickly and if they are fair and realistic with their pricing aspirations will avoid tenantless periods.

The vendors in the sales market are also in good stead for 2010 with instruction levels up 23% in January and it has been noted that the supply problem will fade over the course of the year. The UK market is currently attracting foreign investors due to the low interest rates and weak pound and vendors are obtaining quick sales at their desired prices. In fact Hamptons International had a strong first month of the year with; 11% more applicants; 34% more sales agreed importantly 70% more properties sold versus January 2008.

Therefore, the advice from this property company is that if you would like to sell your property in 2010, now is the time to instruct an agent before the election and the potential changes that could affect the market place.