This year, the housing market is especially uncertain. But what isn’t? Home assesses whether you should gamble on an early move or hang on until spring
Have you had the conversation yet this year? Not the one about clean eating, when to break your dry January or pretty much anything to do with Trump, but the one about whether 2017 is going to be the year you move house.
“Should we sell now, darling?” it starts. “Spruce the place up, get a few agents round and just do it? We put it off last year, and everything is still uncertain, but house prices are still going up, aren’t they?”
A pause, broken only by the crunch of sourdough toast and the purring of the Nespresso machine, is followed by the considered reply: “I’m not sure. The budget’s in March, then there’s Article 50, and that other house down the road didn’t sell at all. Let’s wait.”
Then there are those who can’t bear to talk about it any more. The downtrodden owners who ponder in silence the struggle to sell their home.
Like a household still divided by Brexit, those for and against selling this spring have plenty of statistics, commentary and anecdotes to back their argument. But before we dismiss experts again, here’s the thing: maybe the evidence is right on both sides. Maybe there’s just no certainty about what the market will do.
On the one hand, there are signs that prices will weaken this year: Foxtons estate agency has told shareholders that sales will probably reduce in 2017, while the outspoken buying agent and market analyst Henry Pryor predicts that average prices will drop 4% during this “nasty” year. Yet on the other, most housing consultancies and economists forecast modest rises. The Halifax says prices went up by 2.5% in the last quarter of 2016, despite Brexit uncertainty, with low interest rates and a shortage of supply set to gently bolster values this year, too.
“Those who wait for the absence of all uncertainty before taking the plunge will end up in a funk of confusion and frustration,” warns James Greenwood, director of Stacks Property Search & Acquisition, a buying agency. It’s a view shared by Mark Rimell, a partner in the country-house department of Strutt & Parker estate agency. “Uncertainty is the new normal,” he says. “Seasons are out the window.”
Richard Greener, managing director of the Northampton estate agency that bears his name, is even blunter: “No one really knows what will happen in the future.”
So, for befuddled owners and potential purchasers, the advice is that if you want to sell or buy, go ahead — but deploy the right tactics. That way, you’ll be as prepared as possible for whatever the government, Brexit and the economy throw at you.
For starters, vendors need not give the game away by marketing their home publicly; this means they can experiment with pricing and their choice of agent before “coming out”.
Will Peppitt, a director at Savills estate agency in the southeast, says off-market techniques — with no “For sale” board, no listings on websites and no brochures — oblige an agency to present a property to its list of potential buyers. “Vendors get a chance to test their agent, and make sure their promises aren’t hollow, without committing to a full campaign,” he says. “If the price is optimistic, it can be adjusted without losing face.”
That’s a key point for sellers to remember — dropping the price is no longer the admission of failure that it used to be. Buying and selling agents alike admit that in the current hard-to-read market, which varies from day to day and street to street, getting it right first time is tough. At the end of 2016, 33.4% of homes listed on the property portal Zoopla had their asking prices reduced, according to the company’s communications director, Lawrence Hall — but this proportion “had remained relatively constant over the previous 12 months”.
If you do revise down your price, do it wholeheartedly. “Anything less than 5% isn’t worth it,” says Katie Griffin, managing director of the Devon estate agency Sawdye & Harris. “No one paying £500,000 thinks it’s a bargain if a seller knocks £10,000 off.”
A carefully calculated price drop can also open your home to a wider audience. “Check the search bands on Rightmove to make sure your new price is below the bracket you were in before,” Greener advises. “This will put your property in front of people who’ve never seen it.”
These insiders’ tips, accompanied by more familiar measures such as decluttering, keeping the place free of wet dog smells and ensuring that brochure photographs are taken on white-fluffy-cloud days, should mean your home shifts even in a challenging market. And if it’s still languishing unsold in May? Jeff Doble, chief executive of the London estate agency Dexters, offers this simple suggestion: “You really have to consider switching agents.”
For those looking to make their move, the first task is research — not just checking out where to live and how much to spend, but looking into the motives behind the sale of the property you want to buy.
“How long has it been on the market? What’s its history of price reductions? Why hasn’t it sold? Have the vendors found somewhere to buy? What have similar places sold for?” These are the questions that Rachel Johnston, a regional director at Stacks Property Search, wants answers to.
Just because a property has had its price reduced once, it doesn’t mean further negotiations are out of the question. “Sellers may be inclined to accept a lower offer for a whole range of reasons, even if they think the original price to be fair,” Johnston says. “Be diligent when exploring how the asking price was reached — knowledge is power.”
Home.co.uk is good for benchmarks, giving a “typical time on the market” for homes in each region. (In December, this ranged from 70 days in East Anglia to 141 in Wales.) It also details average regional asking-price changes and stock levels. The more homes are on sale in relation to buyer numbers, the more sellers will compromise on prices.
Some property types are weaker than others, so are more likely to be discounted. Many flats in central London are now cheaper than they were just a few months ago: Savills says average prices in prime areas of the capital are 12.5% lower than in December 2014. Likewise, buying agents report that remote rural family properties, especially unmodernised ones on roads (rather than surrounded by private land), are falling out of fashion. This means sellers are more likely to reduce prices — offering bargains for opportunistic purchasers.
“As with any market softening, the second-rate properties are hit first,” says Jo Eccles, managing director of the search agency Sourcing Property. Other housing types that have become unpopular and offer likely discounts include any home with large grounds requiring high maintenance; poor-quality basement flats; and walk-up top-floor apartments.
Yet many other properties are in high demand and selling at or beyond their asking price, including those in urban areas near transport hubs and those coming to the market at or below £900,000, which incur less stamp duty than they did before the rules were changed in December 2014.
New-build homes, where price cuts are often largest when the market is clearly falling, are rarely discounted now, with one exception. If quarterly or annual sale periods are nearing their finishing dates — they vary from builder to builder, and sometimes between regions for the same builder — there may be scope for bartering.
Finally, the bravest could take a punt on selling their home now, then sitting back to see if the market falls before purchasing. “It’s best to put yourself in the most attractive position for the vendor, so renting and getting your ducks in a row is a good option, but it’s not for everyone,” says Rupert Lawson Johnston,
head of Strutt & Parker’s Chichester office.
This tactic relies, of course, on prices falling enough between selling and buying to cover rental and storage costs. Which brings us back to the fact that, after the surprises of 2016, there’s no unanimity on this year. Will prices fall or, as has happened so often of late, will reality defy the predictions of the pundits?
No one knows, which is why those breakfast discussions are difficult to resolve with logic. Instead, many people just accept that uncertainty is here to stay. Roarie Scarisbrick, partner at the buying agency Property Vision, puts it this way: “It’s dangerous to try to second-guess this market. You might get lucky — but there’s always the danger that you will get caught out.”
TIPS FOR SELLING
Don’t necessarily choose the agent who recommends the highest price — research similar properties.
Declutter, complete DIY jobs, convert rooms back to their original use and get the pets out.
Ensure the agent has good-quality photos — don’t be afraid to insist on better.
Check that the property will be advertised on the portals with the most traffic.
TIPS FOR BUYING
Thoroughly research the vendor’s motivation for selling to uncover any possible price compromises.
Don’t let any previous reductions deter you from making an offer further below the asking price.
Get your mortgage, solicitor and paperwork sorted so you can move quickly.
Use portals and websites to assess the value of similar properties nearby.
Average time on the market
Wales 141 days
Yorkshire & Humber 112
West Midlands 90
East Midlands 87
Greater London 80
East Anglia 70
Source: Home.co.uk. Figures are for December 2016
Properties for sale
North Yorkshire £799,950
The term ‘period gem’ is hackneyed, but it certainly fits this grade II listed Georgian detached house in Masham, with a Victorian extension. It’s currently run as a seven-bedroom B&B, so there’s plenty of space for a big family — or you could just take over dishing out the full English to guests. 01423 582760, carterjonas.co.uk
If country houses really are falling out of fashion, it could be bargain-bagging time. This extended, refurbished three-bedroom property is in Penton Mewsey, two miles northwest of Andover, served by trains to London Waterloo. It has beautiful views over open fields and a garden filled with fruit trees. For cricket and tennis fans, there are popular clubs in Penton Grafton and Penton Mewsey. 01264 316000, myddeltonmajor.co.uk
It’s in a gated scheme at Pentire Point, near Rock, but this flat is a far cry from West Country vernacular. It has a circular lounge, three bedrooms, two bathrooms, a kitchen-diner and a spiral staircase that takes you up to a domed sitting room, an ideal spot for drinking in the views. This is an ideal weekend bolthole — if you’re willing to stump up the additional 3% stamp duty on second homes. 01932 860537, sothebysrealty.co.uk
Set in half an acre of grounds that back onto a woodland, this six-bedroom detached house in Chilworth, north of the city centre, has a double garage and a pool with a retractable cover. There’s also a walk-in attic, but don’t worry about bumping your head: it’s full height. The property is handily placed for trains to London and for Southampton airport, as well as the M3 and M27. 023 8181 0736, morrisdibben.co.uk
On the idyllic south Devon coast, 13 miles from Exeter, this grade II listed cottage in Teignmouth is traditional on the outside and cosy on the inside. The three-bedroom house has an inglenook and a logburner in the sitting room, with a feature fireplace in the dining room. It’s a mile or so from the town centre and the beach, but a stream babbles beside the garden for stone skimming. 01392 875000, wilkinsongrant.co.uk
West Sussex £950,000
This detached Georgian manor in Climping is all very Anthony Trollope. Built as a vicarage in 1670, it’s now a six-bedroom house with vegetable gardens and a brick workshop. Trains to London Victoria run from nearby Arundel and Barnham. 01903 885886, jackson-stops.com
London W11 £4.5m
In years past, a four-bedroom house just off Ladbroke Grove would have flown from the estate agent’s window. Is that still the case in today’s market? Here’s one that ticks all the boxes — plenty of entertaining space, a southeast-facing patio, a terrace with views of the communal gardens, and Portobello Road market on the doorstep. 020 3151 4184, hamptons.co.uk