Homebuyers still on the hunt despite gloom

Despite all the talk of doom and gloom, large numbers of people are keen to move but face an acute shortage of homes for sale in most areas, says a leading property website.

According to Rightmove.co.uk, there were 27% more searches for homes in the first 10 days of 2012 than in the same period a year earlier.

However, buyers are faced with the lowest level of new supply per estate agency branch that Rightmove has ever recorded - averaging less than one new listing per branch per week.

Rightmove director Miles Shipside says: "Old records are being shattered as search activity surges. Potential buyers and sellers are looking more often and researching more thoroughly.

"In areas with a lot of property up for sale, buyers are looking hard for properties with something really special in terms of value, potential, location or quality of finish.

"If it doesn't shout 'special', they are unlikely to overpay for the privilege of buying an average property in these mortgage-constrained times.

"In locations with little stock for sale, online junkies are ready to pounce on fresh property coming to market to see if it meets their housing needs. This search addiction is in part caused by each agency branch currently listing an average of less than one new property per week, an all-time low and around half of pre-credit crunch levels."

Rightmove thinks the low levels of turnover will only ease when mortgages are easier to obtain.

There were more than 44 million property searches on Rightmove in the first 10 days of 2012 - highlighting strong pent-up demand to move, and also caution among value-seeking buyers taking extra care to research the market before they dive in.

It suggests that if a larger number of mortgages was available, transaction numbers could pick up sharply after three years of stagnation.

Average unsold stock per estate agency branch is 66, the lowest Rightmove has measured since February 2010. But the 36,433 properties coming to market this month equate to an average of less than one new listing per branch per week.

Agents say prospective sellers are deterred by lack of confidence, lack of choice and tight mortgage lending.

Contrasting conditions in local markets will drive prices: the shortage of homes for sale in some areas will help to underpin asking prices.

Despite minimal turnover levels, January also produced the beginning of a 'spring bounce' in asking prices of homes coming to market, with an increase of 1.4% in the first week of 2012.

Prices also appear to be little changed in the past year: up by a nominal 0.4%, though with RPI running at 5.2% this represents a fall in real terms.

Shipside explains: "Increased market fragmentation caused by the credit crunch means success in selling now requires a very careful and complex micro-market analysis, rather than a wishful price-punt to see what happens.

"There can be hotspots and blackspots by property type within the same location depending on local buyer confidence, demographics and their ability to obtain a mortgage.

"There will be upwards price pressure where the local market is short of a type or style of stock. In these areas, getting a property onto the market soon could be to a seller's advantage, given the strong upsurge in property search activity."

Rightmove thinks the market will remain challenging and fragmented during 2012.

Likely winners include deposit-assisted first-time buyers, equity-blessed trader uppers, savvy buy-to-let investors, some golden oldies and those selling homes 'with a difference'.

Likely losers in 2012 include trapped renters, those growing families who would like to trade up but lack the capital in their existing home to do it, and

Rightmove 01908 308 500 and www.rightmove.co.uk