Buyers need to see the opportunities, right now.

Thursday, October 14, 2010 by Ed Mead

As a reasonably typical example of a home owner with a mortgage I’m in the middle of playing the fix vs tracker game. No fun and as likely to keep me awake as worrying why the headmaster had summoned me to his study.

Surely an almost unprecedented 5 year fix at 3.69% is too good to resist. But is the fact that rate’s there at all a sign that rates will stay low. Therefore the 2.19% trackers about are surely a better bet, but only for two years and then if rates are going up…….arrrggghh.

Sometimes it takes being on that side of the fence to be able to see why having my estate agent’s hat on can be so frustrating at the moment.

I can’t remember buyers or sellers having been this indecisive and that’s surely a recipe here in London for buyers to try it on. Unusually the one size fits all economic policy for the UK suits those here well. London tends to have a high proportion of those with jobs and money, so accessing the cheap mortgages, even the threatened interest only ones, is eminently possible. The only thing holding these well qualified buyers back is a worry about values falling.

Perfectly valid, but why wouldn’t that stop anyone trying it on with an offer that takes account of such concerns. The English (including me) are terribly wet when it comes to making offers. If a property is on at £395k a Brit would often think they’d done well if they got it at £390k. Foreigners don’t have that problem and would be bidding quite happily at £350k. Trouble is they’re less in evidence than they were.

So, to recap, we have a market that now favours buyers, we have the lowest mortgage rates ever with a good chance they’ll stay that way for a very long time, we have a stock overhang with many properties now on for well over three months with jittery owners willing to listen to offers, we have asking price reductions to much more realistic levels and many buyers now have the field pretty much to themselves…………………………..given all that it’s odd not to see more people trying their luck.