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Wednesday, December 02, 2009

Property in the south - the gap between buying and selling

Staying in line with the recent trend of the last few months, buyer interest in houses for sale continues to surpass the available stock. Therefore, continued seller power has witnessed an increase in house prices year on year. However, the southern UK property market may change within the next six months, with sellers and those with property developments advised to take advantage of the current and profitable conditions.

With falling interest rates and more incentivised mortgage lending than a year ago, buyer power may indeed increase over the next few months, showcasing the idea that the southern UK property market is now not only recovering, but looking set to peak for the new decade.

However, the same confidence cannot be said for the property rental market in the south of the UK. Rental market conditions have experienced less and less houses and apartments available for rent. Across the country, there has been almost a 25% decrease in rental stock levels, with Home Counties near the London commuter-belt witnessing almost 50% decreases since this time last year in 2008. Rental management has become increasingly more difficult, with restricted choice limitations for potential renters. Landlords have thus far assumed that these conditions might increase rental values, but with tenants unwilling to over-pay, properties for rent with too high a price are finding enthusiasm hard to come by.

This problem has been exacerbated due to an unexpected increase in the number of landlords and tenants agreeing to tenancy extensions, frustrating potential property purchasers who are now finding it difficult to identify their next buying opportunity. These people are now holding on to their tenancies for longer periods of time, and contracting the rental supply stock even further.

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