2011 Housing Market Predictions
12 November 2013
As the year end has come and gone, I’m sure many people who work within the property market will be relieved that the somewhat challenging 2010 trading period is over.
“At the start of the year we recognised that there was a renewed feeling of optimism towards new home sales; consumers had shunned the doom and gloom that seemed to dominate 2009 and visitors to our developments - as well as sales - had reached a new high, despite mortgage lending still being difficult.
“For Persimmon Homes Midlands, this good news came in the form of a significant increase in interest from new buyers and a 20 per cent rise in reservations compared to the previous six months.
“As the year progressed, however, dark clouds emerged on the horizon in the form of economic uncertainty and the impending change in Government which had a detrimental impact on the rising consumer confidence we had witnessed during the first half of the year.
“Surprisingly, we felt that factors out of our control, such as the World Cup and the hot summer also kept househunters away from our developments, with many opting to stay put rather than look for a brand new property.
Further contributing to this fast emerging feeling of disheartenment, the change in Government, comprehensive spending review and the threat of job cuts has also fuelled the mass feeling of pessimism surrounding the economy as a whole.
Optimistic Outlook in 2011
There is no denying the challenges of the past few months and whilst we are not out of the woods completely, we are pleased that the economic outlook does look poised for signs of recovery and that 2011 will be a year of prosperity, as opposed to the austerity of recent times.
As we are now in 2011, business confidence within Persimmon remains confident and upbeat and we clearly recognise the external challenges that are beyond our control.
On a positive front, interest rates remain at an all time low of just 0.5 per cent, which represents great news for home owners, meanwhile, experts from the Centre for Economics and Business Research are predicting house prices will increase in 2011.
Also, the Government spending watchdog, the Office for Budget Responsibility, has predicted job losses owing to welfare spending cuts could be 90,000 fewer than expected and the London 2012 Olympics will present the UK economy with a massive procurement opportunity in the region of £7 billion.
Forecasting for future success is very much down to the gut feel and judgement of the business, but one thing is for sure, we are well placed to cater for our customer-base across Northamptonshire and the wider areas of Bedfordshire and Buckinghamshire where we also have a strong sales presence.
Incentives continue to be an important part of the way in which we sell to our clients and part exchange and shared equity deals have proven extremely popular.
With our part exchange scheme, buyers can swap their old property for a new one and because we handle the sale for them it removes much of stress that is normally associated with moving. This incentive has worked well for those looking to move up the property ladder and has been extremely successful, with many completions undertaken within a matter of weeks.
Shared equity is an incentive designed for those on lower incomes and for first time buyers who perhaps don’t have enough of a deposit. It works whereby Persimmon holds up to a 15 per cent share of a purchaser’s new home, meaning that they only have to find a mortgage for 85 per cent of its value, which is more affordable. The remaining percentage is then paid off over a period of 10 years.
We will continue to work hard to offer customers value for money and the very best deal on the market. We recognise, for example, that first time buyers are crucial to sustain the entire property market which is why we remain committed in helping them in any way we can.
With the incentives we now have in place, we are in a strong position to be able to offer our customers a home that is competitively priced, and with our wide selection of detached and semi detached family properties available as well as mews homes and apartments, those looking to move in 2011 could reap the benefits of buying with us.
I certainly think that now is a good time to start thinking of buying new because the cost of a mortgage at the moment is still cheaper than renting and furthermore you are gaining ownership of an asset.
So as we are now in to 2011, the advantages for new homebuyers in my opinion still far outweigh the negativities.