Housing stock set to rise
"in the short term at least there should be a greater choice for sellers"
A combination of the imminent, if delayed, arrival of HIPs, the usual summer increase and the reduced impact of Stamp Duty should lead to more properties coming on to the market over the summer months, according to Andrew Bush, a director of Bush.
"The start of 2007 has been a particularly tough period for buyers," says Andrew. "Whilst the first quarter of any year generally sees a price increase, the early months of 2007 have been worse than most as sellers have been happy to hang on their properties and watch the prices rise.
"This has led to a bigger than usual difference between demand and supply which means that prices continue to rise and merely exacerbate the problem.
"Along with higher prices, the gap between what people own and what they aspire to is also growing. Particularly in Cambridge, the number of houses priced at over £500,000, £750,000, or £1 million, three significant price points, is growing all the time and buyers feel they ought to be reaching out for that level of property.
"However, we do see signs that at least in terms of the numbers of properties coming on the market, there is a slight easing of the situation.
"This is partly due to the imminent arrival of HIPs. Any home on the market before if comes into play, does not require a HIP and many sellers are seeking to take advantage of that. Indeed, the latest RICS survey suggests that new instructions rose in April for the second month running, reversing the decline of the last seven years. As a result, the stock of unsold property rose across the market for the first time since November.
"The HIPs impact, along with the usual summer increase, means that in the short term at least there should be a greater choice for sellers wishing to either get into the market for the first time or take that next step up.
"A further reason for the increase in sales in Cambridge is that Stamp Duty is no longer the issue it once was. Previously, with houses up to £250k carrying Stamp Duty of just 1%, whilst those between £250,001 and £500k carried 3%, there was little point in agents marketing houses at between £250,000 and £260,000 because buyers would simply offer under £250,000 to avoid the extra duty.
"These days, that's simply not a problem. Buyers, particularly those on the second rung of the ladder or higher, are realistic enough to know that they are likely to have to pay 3% Stamp Duty to get the property they're after, so the squeeze at around the £250k mark doesn't exist any more.
"The same is true the higher up the market you go. The 4% payable on properties over £500,001 is just accepted as a fact of life here, along side the fact that Cambridge is an area of high property prices. If you want a substantial house, Stamp Duty is just another necessary evil to put into the budget."
For more information call Sarah-Jane Jarrold at SJPR 07730 494 154
