It appears that consumer confidence is higher and there are more people keen to move house.
At the Bank of England’s quarterly inflation briefing last week, the Bank talked about the pent up demand that it believes exists in the mortgage market and that, as soon as credit conditions ease and confidence picks up, there could well be a flood of people returning to the housing market.
It appears to me as if this process may well be starting already.
There are two key drivers as to why people move house: either they really need to, because they are relocating, have a requirement for more room or have financial reasons to move; or they are tempted out, because they’ve seen an attractive house come onto the market, for example.
Those who have to move will do so regardless of market conditions.
Yet, there is also a mass of people in the middle who don’t desperately need to move, but who would like to, and who can choose when to buy and wait for market conditions to be right for them.
It is this mass of people who make up the bulk of the transactions when times are good.
But when they feel uncertain, they often put off their decision and wait to find out what is happening either with their job, the economy or interest rates etc.
It appears that some of these people have started to make a move again now that conditions are much more static: interest rates aren’t going anywhere very quickly and house prices have been stable for the last two or three years, so people with the inclination and the means to move house no longer have a reason to put it off.
Some are tempted by new houses coming onto the market, while many others are just fed up of waiting. It seems that many people who may have put off their move for a couple of years are now deciding to just go for it.
There are, of course, a number of factors that may arise this year and alter this balance, not the least of which is the situation in Europe and the impact that will have on credit availability.
However, while it’s still not easy out there for many borrowers, we certainly seem to be experiencing something of a renaissance in the first part of this year.
Jon Round is chief executive of First Complete
