subject: Your property sale/purchase and the spending cuts [print this page] Your property sale/purchase and the spending cuts
With property, the key effects, whether you want to do a self build, rent for the first time, or trade down for the last time, are literally down to how confident people feel about the market as a whole and of course supply and demand.
If you're buying and/or selling property or land, then you're largely affected by confidence in the market and the number of people seeking to sell or buy property. Something that would be a major influence is the supply of mortgage finance, which is dictated by your income and so is also dependant upon the state of the job market.
So to understand the impact of the spending cuts on the buying and selling market we need to ask the following series of questions:-
Will the spending cuts force more people to sell their property?
Currently we are only selling half as many homes pre credit crunch and this budget is likely to ensure that less people are inclined to sell up and move on as their confidence in the future won't be very high, so they are more likely to 'stay put', unless they are forced to sell.
Will the job cuts force people to sell their homes?
In the main the job cuts are expected to hit women and will be spread over four years. It is quite likely that there will be an increase repossessions next year, but not in vast amounts. What is more likely is that job cuts in the private sector due to lower spending by the government will hit next year, so stock may rise, which will drive prices down.
Will the spending and job cuts stop people buying?
The media chatter and threat of more job cuts is likely to put people off buying at least until Xmas if not beyond, consequently it is likely that buyers will be few and far between next year.
Impact of the Spending Cuts on Buying and Selling Property in 2011
Overall the property market will divide in two across the country next year. Those regions hit hard by local authority and government spending cuts, job losses etc, are likely to see their property prices dip as demand remains low and more people try to sell their property.
Essentially if you do want to sell your home, only look to do so if you are trading up, so you save more money on your next property or if you have to sell.
If you're looking at buying as a first time buyer, then you may get a good deal. You should carefully assess the true market value of the property, then if you can get between 10-20% off, this will shield you from further falls.
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