“It’s a buyer’s market” is a phrase you might commonly hear when economic times are tough. But what exactly does it mean? If you’re a buyer, how can you make the most of the circumstances and turn them to your advantage? Read on to find out.
FAQs
What is a buyer’s market?
In real estate, a buyer’s market is when there is plenty of supply, but not much demand. More specifically, there are loads of properties for sale in a given area, but not many people are interested in purchasing them.
What causes a buyer’s market?
There are lots of reasons why buyer’s markets occur. Fears of a bursting housing bubble, mass construction of new homes in an area, massive economic uncertainty. These are all viable reasons.
Generally, anything that puts people off relocating in significant numbers can help cause a buyer’s market.
What are the main characteristics of a buyer’s market?
The main characteristic of a buyer’s market is that house prices fall. Usually, a sharp drop in prices is what causes both buyers and sellers to think that there’s a “buyer’s market” occurring.
Falling house prices can often lead to further price reductions. This is because those property owners who want to sell find that they have to reduce their asking price to meet the current level of competition. Homes will also likely remain on the market longer than usual, while attracting fewer offers.
Was the UK in a buyer’s market in 2022?
The UK was not in a buyer’s market in 2022. Even though you might have thought that COVID-19, Brexit and the ongoing cost of living crisis would create the kind of uncertainty necessary for a buyer’s market, it was actually still in a seller’s market.
This happened because there were still not enough homes on the market to satisfy demand. Accordingly, house prices were still rising, and remained highly desirable, even with interest rates rising.
Is the UK in a buyer’s market in 2024?
In 2024, the UK housing market is much more of a buyer’s market than in recent years. Property supply has increased significantly as developers reacted to rising demand of the covid years. Buy-to-let buying is becoming more popular again as interest rates stabilise, making mortgages more affordable.
Crucially, house prices have fallen or levelled off in key markets across 2023, and are not expected to rise significantly in 2024. Some analysts are even predicting a 3% drop in prices for 2024. This means that homeowners wanting to sell are encountering greater competition to interest buyers who have more choice and more flexible financing options.
How can buyers leverage a buyer’s market?
Buyers can make the most of a buyer’s market by:
- Shopping around safe in the knowledge that there is plenty on offer.
- Putting in competitive offers, or even ‘cheeky offers’, if the seller is motivated enough. A cheeky offer is broadly considered to be around 15% lower than the asking price.
- Negotiating for sellers to leave desired fixtures and fittings in place. White goods, garden furniture, period feature fixtures, these are all good areas to consider.
Will UK house prices fall in 2024?
Plenty of news outlets and industry observers believe that UK house prices will fall in 2024. Most don’t expect a major housing market crash, though a slight fall (2-3%) overall seems likely. This will strengthen the buyer’s market further.
Bear in mind, national housing market trends don’t always affect all regions equally. If you’re looking to buy, always do a little research into house price trends in the local area. If you’re looking for something in a city, also check what’s going on in the nearby towns and villages. Equally, if you’re planning to buy in the country, also look in on the nearest big city. This will give you a clearer context of what is happening across the region.
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