Peter Barry 2016 Property Update
Activity levels since the turn of the New Year have been high with large volumes of buyer and tenant enquiries and numbers of potential sellers and landlords requesting valuations to assist them with their plans. Not all of this activity has yet turned into transactions with the biggest issue being a continued reluctance amongst many potential sellers to list their property before they find an alternate property to purchase.
Whilst this approach is, on the face of it, understandable, in reality it is counter-productive and actually fuels increased prices through increasing the surplus of demand over supply.
If more people listed their homes for sale it would provide more choice in the market and make it easier for everyone to find another property.
Sellers have nothing to lose and everything to gain by listing their properties before finding one to buy.
They can be more positive with their asking price. If left until a property has been found, there may be pressure to sell quickly and a failure to maximise the value. They put themselves in a stronger buying position by having a buyer for their own property. Ultimately, if a buyer won't wait, then a seller is in no worse position than they were to start with.
The early part of 2016 has seen an increase in activity amongst buy to let landlords who are eager to extend their portfolios before the proposed stamp duty increase of 3% on second properties become active from April 1st. This deadline means property sales must complete before April 1st in order not to trigger the higher tax payment. It is likely that there will be a slow-down and readjustment of the buy to let acquisition market once this deadline has passed. This may, as the Government intends, make it easier for first time buyers and others to purchase properties for their own occupation, properties that were previously being acquired by investors.
With interest rates looking set to remain low throughout 2016 and with employment levels at record highs, the general economy looks set to continue to grow, albeit slowly and people can plan their property moves with confidence. House building in 2015 was up around 20% on previous years and the Government has introduced a number of measures to look at increasing both the volume and the speed with which more housing can be made available.
Whilst an increase in housing stock is a priority it will undoubtedly meet resistance in some areas where it may entail an erosion of green belt land or where infrastructure elements such as schools and transport are considered inadequate.
All in all, we expect 2016 to be a steady year for the property market with demand and availability of funding being balanced against supply and affordability.
Tony Ryan, Manager of Peter Barry discusses the problems of supply and demand in the property market.