Buyers have the edge now

With fewer homes for sale, smart purchasers can pick up a bargain, says Stephen Pritchard

The start of this year saw the number of properties on the market fall for the first time in eight months, according to the Royal Institution of Chartered Surveyors (RICS). This comes after a quiet end to 2004, with surveyors reporting low levels of activity from buyers and sellers alike.

The start of this year saw the number of properties on the market fall for the first time in eight months, according to the Royal Institution of Chartered Surveyors (RICS). This comes after a quiet end to 2004, with surveyors reporting low levels of activity from buyers and sellers alike.

For buyers, a shortage of properties to view is frustrating, and potentially expensive. If too many people start to chase an ever-decreasing number of properties, local prices could be forced up, however depressed the wider market might be.

But a shortage of properties can also be an opportunity. Sellers might be deterred from marketing their homes because they are worried about market uncertainty, or because they feel that there are few buyers out there. This is especially true of entry-level properties, as all the main housing market surveys suggest that first-time buyers are very thin on the ground indeed.

For the keen buyer with finances in place and, ideally, nothing to sell, buying now represents a chance to take advantage of a strong hand. There will be sellers who are prepared to negotiate with a strong buyer, perhaps bringing a more expensive property within reach.

Developers of new-build property are offering a range of incentives, from paying stamp duty to mortgage subsidies, especially on onsold plots on otherwise completed developments. There are also plenty of buy-to-let landlords who might be persuaded to sell and take their profit, if the right kind of buyer comes along. Landlords might well be willing to accept an offer from a buyer who can complete quickly, so that they can realise any capital gains on the property by the end of the financial year, in April.

According to Jeremy Leaf, a housing market spokesman for RICS, the relative shortage of properties on estate agents' books is actually a good sign, suggesting a stable market. "We are not expecting or seeing any signs of panic selling, or of price drops." He points out that activity levels in the market dropped most sharply in November and December, but are now recovering. Surveyor-run estate agents report that they are organising more viewings, but as yet that is not translating into higher levels of offers. "Buyers are not showing the urgency that they were even six to nine months ago."

He points out that as prices are no longer going up as fast, buyers are not under pressure to tie up a deal quickly in order to get ahead of a rising market. RICS reports that the average house purchase now takes five months; Mr Leaf cautions that this average masks some transactions that will be taking significantly longer, perhaps eight or nine months.

This can work to the advantage of the chain-free buyer, as the most common cause of delays in house purchases is a problem somewhere in the chain. But this does little to help a would-be buyer if they cannot find the place they want in estate agents' windows.

There are tricks, though, that can help. Buyers can continue to exploit the tactics that worked in a busy market. Organising finances, including the mortgage and the source of a deposit, will convince estate agents that a buyer is serious.

Working with a good mortgage broker can help here, as they should be able to organise all the paperwork quickly, as well as providing access to deals that might not be available on the high street.

There is anecdotal evidence to suggest that estate agents take a mortgage offer from a reputable broker more seriously than an offer in principle printed off from a lender's website.

Casting the net widely is another effective tactic. Although it is tempting to stick to estate agents local to the target area, sometimes agents on the fringes will have suitable properties. The internet is also a good way to fill in gaps in a search. You cold also try walking the streets, looking for private sellers' boards. Keeping in regular contact with estate agents will also increase a buyer's chances of seeing properties as soon as they come on to the market.

Agents might even be persuaded to call round potential sellers on behalf of a serious buyer.

An estate agent might have valued a property, but the owner has yet to give a formal instruction. A keen buyer with finances in place might be just what it takes to convince them to go ahead. The seller might even be willing to be flexible on moving dates, perhaps by renting, in order to secure a good offer in a quiet market.