The price is right

When not discussing the health of Susan Boyle, last night’s winner of the Apprentice, or the dubious virtues of the new Big Brother contestants, the current state of the housing market remains the primary topic of debate throughout households across the country.

Above: Percy knew that it would take more than the smell of fresh coffee and baking bread to sell his home

With reports stating that public confidence in the housing market is slowly building and poor buyer sentiment is receding, house prices remain close to long term affordability, and interest rates are likely to remain low for the foreseeable future, how can we provide impetus to help the market?

My recent forays into the property market have provided me with a personal insight into its various machinations. Whilst my qualification wasn’t gained in economics, I do profess to having gained a degree of common sense that qualifies me to suggest a few ideas to keep the buying and selling process moving.

As a very basic summary of the property market over the past six months, there have been quite a lot of sellers, a large number of interested buyers, but very few sales taking place. The tightening of lending criteria has obviously played a huge part in this, and a change in the general attitude of buyers and sellers is required to boost sales.

Trying to attain the perfect deal causes stresses and frustrations. As a general rule of thumb, irrespective of whether you are the vendor or the purchaser, always remember that you won't get the best price on your property deal. It is almost inevitable that you will not buy at the bottom of the market, or sell at the top of the market. We cannot all get the best price.

Sellers who simply cannot wait for prices to rise again must reduce their prices to a level at which they think their property will actually sell. Buyers will still try to haggle, but because the house is priced correctly, vendors should stand their ground as prospective buyers will continue to call. There is of course the danger that agents are under-pricing your home for a quick sale. Again, trust your own judgement.

Confidence and the power of perception play a large part in dictating the direction house prices move. Buyers waiting for the bottom of the market are playing a risky game as once a consensus is reached, buyers will rush in once more. Far better to consider making a best guess on the eventual market bottom and start making offers based around that figure.

A realistic and competitively priced house will help everybody involved in any individual sale and purchase, as well the market in general. The likelihood of having a mortgage approved increases if the asking price is slightly lower and more reasonable; lenders are well aware how inflated some house prices are.

Whilst the points raised are achievable they do require a change in human nature, as those involved in the housing market must be satisfied simply to do better than average, and get something of a bargain. Satisfaction will keep the market moving but provide disappointment for those expecting to get much more from the get-rich-quick property game. If the natural urge always to bag the best possible deal can be controlled, then the one good thing to come out of the recession will be an end to house price mania, and the start of a healthier relationship towards property

Lee Tillcock, Editor of Moneyfacts