Wednesday, 8 January 2014

At last, people might decide to sell the house

There's a turnaround in the number of people thinking it's a good time to put their homes on the market, according to the Halifax.

It says 51% see the next 12 months as propitious for selling, against 39% who don't agree. Three months ago it was the other way round.

The finding is based just on a MORI survey of 1,984, adults around Britain, but this is an important issue, because the dearth of sellers has been holding back transactions.

Plenty of experts warn that there is a shortage of homes, which is exacerbating the jump in prices. One reason is that we haven't built enough, but another is that owners are reluctant to become vendors.

Some suggest caution about the Halifax survey, arguing there hasn't been much of an increase in homes coming on the market...yet.

But the stats are interesting:

*There's a North/South divide. 69% in London think it is a good time to sell, 64% in the South East of England. Only 30% think so in Scotland, 40% in the North East of England and 41% in the North West.

*Those who actually own something are more optimistic. 56% of owner-occupiers (versus 51% overall) and 58% of people with a mortgage.

*Older and better-off people are more likely to think 2014 is a good time to sell.

Why have people been reluctant up until now? Well, part of it is just the general gloom which prevails when the market is seen to be in a trough.

But there are also specific reasons:

*transaction costs, including stamp duty which can be tens of thousands of pounds in higher-value areas.

*the fashion for extending the house rather than selling

*some are trapped (or think they are) in interest-only mortgages

*or they took out a huge mortgage and that's still weighing them down.

*older people not downsizing because they think prices will go up, while savings rates on any profit they'd make are still derisory

Even so, if 2014 became a year for selling it would make a big difference to house hunters and might make a house price bubble less of a danger.

PS - thanks to @HenryPryor for his thoughts!

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