With rising fears of the credit crunch and financial problems worldwide it is unsurprising that predictions for the property market in terms of sales are somewhat gloomy. Recently a report from an official body, the Royal Institution of Charted Surveyors (Rics) has stated that property sales could fall as much as thirty percent this year. In addition, Rics also released figures that property prices in general would fall by around five percent in 2008.
The consequences to this downturn may well lead to a fall in consumer spending, further worsening the financial situation. Purse strings have definitely been tightened in recent years and naturally sales as property, easily the most expensive investment anyone will make in their lifetime is experiencing the brunt of these harder times.
These are however purely predictions, property sales in recent years have been escalating at astronomical levels and understandably at some point this trend had to be bucked. Thankfully for first time buyers the fall in prices may well grant them access to the property ladder that had previously been denied. Sales of smaller homes and flats may in fact rise as those who have been waiting for a fall in property prices decide to buy homes for the first time.
Sales of these smaller properties may increase but it is dependent upon who will be able to sign up for mortgages. The rumblings in the American lending market have led to a record number of non-payments and repossessions; as a result, lenders in this country are now being more cautious with their money. While this will undoubtedly affect those who are trying to gain high percentage mortgages, those who have been saving for a number of years and have accumulated a considerable deposit may find themselves in the fortunate position of lower prices due to the reduced number of sales.
It is currently the case however that many new buyers, instead of buying property at the moment are waiting for even better prices before they decide to buy. While this may leave estate agents troubled, it does at least show a glimmer of hope that sales figures will improve in time.
The downturn in property sales is in no way endemic throughout the entire property market. While negative reports are estimating a fall of as much as a third in the coming twelve months, one market sector is in fact experiencing a golden age. Million pound properties are experiencing an upturn in sales not present in the rest of the property market. It is believed that over eight thousand properties worth a million pounds or more were sold in 2007. This figured is thirty six percent higher than the figures from the previous year showing that the property sales slump is not affecting all sectors.
Most of these million pound property sales occurred in the London area, particularly around the Kensington and Chelsea area, although areas of Surrey and even Edinburgh experienced record levels of sales for his type of property. Sadly for the property market in general these types of properties only account for around half a percent of the total sold, meaning that even though this particular sector is doing well the middling price range of properties is still suffering.
Property sales trends are however regional and London and the South East are still experiencing good sales levels whereas areas such as the Midlands are feeling the downturn more than most. The property market operates on a boom and bust cycle and after the years of plenty that sellers have experienced it is unsurprising that the bubble had to burst at some point.
