Sharp rise in home buyer interest

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by Gill Montia

Early indications from Rightmove suggest strong interest from potential home buyers in 2012, despite the lack of mortgage finance.

Search activity on the property portal shot up 27% in the first 10 days of January, compared with a year earlier.

However, the supply of new homes for sale hit a record low, with an average of less than one new listing per estate agency branch per week.

The beginning of 2012 also saw asking prices down 0.8% on a month earlier to an average £224,060, although Rightmove expects a shortage of new sellers to underpin prices in some areas, as the year progresses.

At the same time, in areas where properties are languishing on estate agents’ books, buyers will need to be tempted with something special in terms of value, potential, location or quality of finish.

Rightmove director, Miles Shipside, comments: “If it doesn’t shout ‘special’ then they are unlikely to overpay for the privilege of buying an average property in these mortgage-constrained times.”

According to Mr Shipside, overall, the UK housing market is now stuck in a low transaction “pit” that will be hard to escape without the mortgage funding needed to satisfy pent-up demand.

Looking ahead, Rightmove expects the market to be “challenging and fragmented” in 2012, with winners and losers identified as follows:

2012 Winners: deposit-assisted first-time buyers, equity-blessed trader-uppers, savvy buy-to-let investors, some golden-oldies (sellers whose properties that have remained on the market for a long period), and those selling properties with a difference.

2012 Losers: trapped renters and sellers of average homes, unwilling or unable to offer a cut-price deal.