Over the last few years, we have consistently heard of fantastic double-digit property and rental growth across the UK and that many properties have been sold and let within a matter of days or weeks.
However, the property market is changing and 2023 is likely to be a very different year.
Over the last few months, we have already seen supply in the property sales market rise and buyer demand fall, which has resulted in properties taking longer to sell.
The chart below from Zoopla shows how buyer demand has been falling since summer 2022:
Other data suggests that, although demand has fallen, this hasn’t impacted on sales as much as expected, with the number of sales agreed at the start of December similar to figures for 2016 and 2017, prior to the pandemic (Source: Chris Watkin/Twentyci).
However, it’s clear from Rightmove data that the amount of stock for sale has increased, with an agent having an average of 48 properties for sale in November 2022 versus 40 in January, and taking 45 days to secure a buyer, when it took just 31 days back in April.
The main question for anyone looking to buy or sell in 2023 is, if the market is slower and prices might fall, how do strategies need to change to make sure people can still make a successful move?
When the market is falling, properties tend to take longer to sell and, with fewer buyers looking to move, you may not have as many viewings on your home before you receive an offer.
The good thing about selling in a falling market is that the buyers still out there looking tend to be very committed to making a purchase – just as the sellers are to agreeing a sale. This means if you can get buyers through the door to view your property, then there is a good chance you will be able to sell.
What’s crucial is that you price your home competitively, making sure you attract the right buyers who have the funds to make a purchase. When the news headlines are full of ‘house price falls’, buyers will always want to feel they’re getting a good deal, to protect themselves from any future drop in the property’s value.
So, if you’re serious about moving, it’s more important to focus on securing a sale, rather than maximising your property price. With an excess of properties for sale, if a potential buyer can’t purchase at what they consider the ‘right’ price, they may simply move on to find another seller that is prepared to take their offer and you could find your property sits on the market for far longer than you want.
Even though mortgage rates have risen, it will still be possible for people to buy in 2023, as 30% of buyers purchase with cash, while 20% have a mortgage loan to value of less than 50%, so are less likely to be affected by the problems with current high interest rates.
A good property, in a good location that is well presented and allows the buyer to easily visualise themselves living there will always sell well – whatever is happening in the market. But do talk to an experienced sales agent to find out if there’s anything you should do prior to marketing to help your property sell more quickly, and what price is reasonable to ask to secure the right buyer.
When buying, it’s always tempting to try and purchase ‘at the bottom of the market’ but, in reality, this is extremely difficult to do. And if you wait too long before making a move, you could miss out on the property that you’ve dreamed about living in for many years, which would be a shame!
Although it’s important not to overpay when the market is falling, you don’t want to make an offer that’s so low it’s insulting to the seller, as that could harm your chances of agreeing a purchase – so just try to offer a price that’s fair. Even if you have to pay a little more than you’d ideally like, remember that we typically live in a property for many years and prices are still expected to rise over the next five years, even if they dip in 2023/24.
The important first thing to do before making an offer is check that your finances stack up and you can afford the property either on the current fixed rates or on lower variable rates if you need a mortgage.
In addition, with the cost-of-living crisis pushing all our bills up, it’s wise to make sure you know exactly what works are required on the property, such as when it might need a new boiler or roof. And, of course, with energy costs so high and no sign yet of when they might be lowered, check the heating bills of the property and its EPC rating.
For help deciding if now is the right time for you to sell or buy a property, come and talk to our experts. Remember a percentage of people will always need to move – so the market will never stop moving, we just need to readjust to it now and then.
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