Major American banks collapsing, base rate cuts but lending rates increase, squeeze on lending, prices falling, uncertainty, forecast not good.

What a cheery start to the second edition of Property Matters in 2008. Ironically as we are writing this article on Monday April 21st, we have just agreed eleven sales last week. These figures represent a fantastic week in a buoyant property market, let alone what is supposedly a flatter one. It is fair to say as we commented last time, there are some real issues regarding the economy and world financial markets. As we speak, the Bank Of England are hatching a plan to underpin the mortgage market and ease the burden of trying to obtain a mortgage at a better interest rate. We firmly believe that this will have a very positive effect on the market. It was welcome news that at the Bank of England’s meeting at the beginning of April interest rates were dropped to 5%, although unfortunately as yet this has not been passed on by the lenders and if anything some of their mortgage rates have increased. There is widespread talk of a further reduction in the base rate in May to 4.75%, which coupled with the government and Bank Of England plan, could offer some encouragement and positive news. There are undoubtedly still a good number of motivated buyers and sellers, although what is clearly evident is that properties are having to sell at a realistic price in order to get people moving. This is not to say that you have to give your property away, far from it, some of the prices that we have been achieving have been excellent and only this week two of the properties that we have sold have had more than one bidder, which is hardly the sign of a very weak housing market. We are finding that as the market has got tougher our market share has improved further still, as there is wide spread public recognition that a very good quality agent, with experienced motivated staff, will be required in order to achieve a result. It is fair to say that in a fast moving market poor quality service can still sell the house, albeit probably at a lesser figure and with more hassle. Inside Property Matters are some interesting facts and figures which highlight our results. The other positive thought is that if you are looking to purchase a property at an increased value then the gap has narrowed. For example, if you are selling a property at £200,000 and looking to buy a property at £300,000 and you are achieving 10% less then you are infact £10,000 better off. In tougher times as a business, you can also take one of two views and that is cut back, or invest to improve. In recent weeks we have clearly invested in our business, with a re-brand, new website, improved property particulars and further advertising, all in an attempt to enhance our level of service and ability to achieve results for our customers. Once again we would urge you to ideally, completely ignore the media, however at times there seems no escape from their constant negative talk. If it were not for the media then we firmly believe that people would feel better about the economy and their own position. The danger is that we talk ourselves into a recession. We firmly believe that whilst the property market is a tough place, there is light at the end of the tunnel and that whilst we still have motivated buyers and sellers, transactions will still take place. Hopefully with the lighter evenings, better weather, further interest rate cuts and who knows possibly even less negative media coverage, things will improve further still. However, one thing will always remain certain in that Sparks Ellison will adopt an exceptionally positive and pro-active approach to everything we do.

It hardly seems possible that it is three months now since launching the first edition of ‘Property Matters’ our quarterly newsletter for local people offering news and views on the local market, topics and events.

Undoubtedly, the final quarter of 2007 proved to be a tough experience for anyone trying to move and connected with the property industry. Talk of the Northern Rock crisis, sub prime lending and global credit crunch and the effects that they may have on the world economy and financial markets, once again played a significant factor in customer confidence, together with the implementation of HIPS. However, we are of the very strong opinion that whilst these issues are real and exist, they are not the main reason for the down turn in market activity in the final quarter. Once again, we are afraid that the media have sensationalised these stories and with their very negative portrayal of what events are occurring, have caused more panic than necessary and indecision amongst potential buyers and sellers. Whilst the final quarter of 2007 saw a changing market place, we at Sparks Ellison were equipped to deal with this through our knowledge and experience and still managed to create some excellent results. Undoubtedly the Bank of England’s decision to reduce the base rate from 5.75% to 5.50% came as welcome relief and saw the first drop in interest rates since August 2005. It is also encouraging that many analysts are predicting further base rate cuts over the coming months, which we feel will have an extremely positive effect on people’s confidence and decisions to move. Since returning from the Christmas and New Year break on January 2nd, there has been an immediate upturn in the level of enquiries from both buyers and sellers, which is also particularly encouraging. House prices in the final quarter of 2007 in Chandlers Ford edged down slightly in line with the general pattern across the UK, but fortunately in Chandlers Ford not to the extent of many other locations. Chandlers Ford remains an extremely sought after location with excellent communication links, schooling and pleasant neighbourhoods. It is vitally important that you continue to update the value of your home in light of changes in market conditions and as a business we are only too pleased to come and see you, even if you are not thinking of moving immediately. Looking ahead for 2008, we are extremely optimistic about the market in general, particularly if we see further cuts in interest rates in the first quarter. House prices we feel will stabilise with no real movement either way, with an upturn in supply and demand being seen. We would like to wish you a happy and prosperous New Year and hope that we can be of service to you during 2008.