2m homebuyers to take advantage of falling prices

Tuesday, 10, Jun 2008 01:36

As many as two million UK homeowners are planning to move home in the near future, in order to take advantage of the falling property market, according to new research.

Analysis from Abbey Mortgages finds, while the market is presently undergoing a stark correction, as many as 1.2 million potential are planning to trade up to a bigger property over the next 12 months.

It is hoped the falling prices will allow buyers to secure a bargain.

Furthermore, 827,000 buyers are looking to sell up in order to rent - waiting for the market to reach a low before they buy again.

An additional 1.1 million people are planning to downsize their home in an effort to combat the credit squeeze and free up capital.

"For some people a falling house price environment is not necessarily bad news," said Phil Cliff, director of Abbey Mortgages.

Research from the Royal Institution of Chartered Surveyors (Rics), released today finds the market is still severely depressed, with transactions now at the lowest level since 1978.

"While the majority of homeowners are planning to stay put and wait for the current volatility to end, two million think that house price falls are a good reason to move," continued Mr Cliff.

"This could be because house price falls bring a larger property within their grasp or because they think they can cash in if they sell up now and wait for the market to hit its bottom.

"However, it is always worth getting advice before making this sort of move as for most people, their house is their largest asset."

The Abbey Mortgages' research also reveals that those who want to buy a new home are willing to wait an average of 7.5 months before putting an offer in.

Finally, there also appears to be a deal of uncertainty and indecision among homeowners, as 12 per cent admit they are waiting to see what happens to property prices before they decide on their next step.

Chris O'Toole