As with the changing seasons, the UK Property market alters shape too. It isn't possible to actually set dates on these alterations because they're driven by sentiment. Pink Finance has put together a typical annual cycle for you to see the effects of market forces and peoples' feelings at different times of the year.
This should help you when searching for property and give you a head start on the rat race. The property market tends to be either in favour of the buyer or the seller.
This is when there is too much property for sale and demand is lower. This may be caused by peoples' minds being on other things. At these times the buyers that are left in the market may be able to make offers that are below the asking price. Because demand is slack the vendor may be inclined to accept the offer.
This is where there is shortage of property and too many people trying to buy. This can lead to rising prices and an over-competitive environment. People are inclined to offer full asking price, or even more, if they're in direct competition. It has been known for people to offer more than offers already accepted at these times. This is known as Gazumping.
As the seasons change from a colder climate to warmer, everyone tends to have a similar idea. It's not pleasant viewing property in cold weather and most people wait till spring.
Demand is slack, so the early bird may attract a good deal, but once the rush starts, prices start to move upwards and more property comes onto the market. Activity creates a feeding frenzy, until people think property has become a little over priced.
The seller is in control!
Demand runs out after the feeding frenzy and people start to think about their summer holidays. The Stock Market is quieter, as traders take extended breaks. The financial world starts to meditate.Property prices stabilise and a perception of greater value starts to creep back into the market. Towards late summer buyers start to believe that if they act quickly they can negotiate on price.
The buyer is in control!
People are back from their holidays and start to pick up where they left off. The buyers and home movers that weren't successful in late spring have still got the bug and start to drift back into action.
Demand is slow at first, with the early risers getting the odd bargain. There's a natural shortage of property, as sellers are not inclined to place their home on the market in summer.
The autumn shortage creates rising prices and an incentive for sellers to place them on the market. Gradually more choice is available and the buyers start to arrive at the party. By the end of the autumn we're back to the frenzy we had at the end of spring. Full asking price is normal, with some property even going for above this.
The Seller is in control!
As supply dries up and the weather turns cold, the buyers decide to place their nest building on hold till early spring. Christmas is coming and maybe a winter holiday to plan.
Prices stabilise again and the buyers that continue to look are rewarded with the odd bargain. Activity is lower and the buyer can make their offer below asking price as they are a rare breed during the winter months.
The buyer is in control!
Pink Finance readers should now be able to spot a market trend, and work the system to their best advantage. Go against sentiment and you will stand a better chance of netting yourself a bargain.
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