The shortage of national credit has caused many would be home movers to look at their current property’s development potential before looking at purchasing a new property. People generally commence a ‘financial lifecycle’ often buying a small flat in the early years, moving to their first house when they get married, a bigger house as they have children, then a larger house out in the suburbs as the kids reach school age, swapping the ease of the commute for greater property value. However, the standard norms of home moving may be radically changing as financial insecurity, coupled with the availability of new mortgage credit is starting to hit home.
The move away from interest only mortgages towards repayment may be having a salutary impact on those looking at bigger more expensive properties as the importance of paying off capital on an existing mortgage is realised. The combination of all these factors may be encouraging people to look at the potential in their existing home.
The Government has recently relaxed building regulations and many households are now looking at extending their own homes, through loft conversions, digging underground to create rooms or standard extensions up to 8 metres in to their garden.
A mortgage for extensions and home improvements is a valid reason for finance from most mortgage lenders and the low rate environment is encouraging many homeowners to build on their existing property rather than move.
Estate Agents have recently indicated a shortage of properties coming on to the market and despite the shortage of buyers, the properties coming to market may be experiencing an artificial high. Recent research suggested that potential buyers refused to even view houses they felt were overpriced, despite there being room for negotiation with the seller – as a result there is a growing sense of property stagnation. Either more buyers come to the market or more sellers come to the market. The lack of both buyers and sellers is causing a unique and interesting position. As prices particularly in London aren’t falling as there remains a shortage of good stock, whilst buyers aren’t prepared to pay the prices being advertised.