Is now the best time to sell your property?
Written by: Paul Thompson on 3rd January 2018
The property market can be affected by various economic issues, not least of which is currently our exit from the European Union. This alone heralds unprecedented challenges ahead, and with such uncertainty over the outcome, it may not seem like the best time to sell your property.
But figures from the Office for National Statistics (ONS) show a rise in average UK house prices of 5.4% in the year to September 2017, increased from 4.8% in August 2017. The annual rate for growth rests at around 5% in 2017, with the average house price in September 2017 being £226,000 - £11,000 more than in the same month last year, according to ONS figures.
So is this indication of general market growth sufficient to encourage you to put your property on the market? Here are a few issues that could influence your decision, plus, if you are still unsure, a potential solution that you may not have previously considered.
According to research by YouGov, on behalf of HomeOwners Alliance and BLP Insurance,
“15%, the equivalent of more than 7.5 million UK adults, put off plans to move this year.” Almost one in six respondents to the Homeowner survey earlier this year, cited Brexit as the reason why their plans to move were delayed.
General uncertainty over our future relationship with Europe, and its effect on the economy, has understandably introduced considerable caution into what is essentially a huge financial decision for homeowners.
Supply and demand
Supply and demand in the property market changes when homeowners delay their plans to sell. The market can stall and stagnate, with an imbalance being exacerbated by stagnant wages and a natural reluctance by homeowners to over-commit financially.
During times of economic growth and rising property prices, it can be tempting to remain in your present home in the hope that its value will increase further. On the other hand, if you are thinking of moving up the property ladder, you need to consider the issue of purchasing your next property before price increases take it out of your financial reach.
Increased cost of living
The reduced value of sterling, higher levels of inflation, and a rise in interest rates, can all depress the property market as home-movers deal with the ever-increasing demand on their finances. In November 2017 the Bank of England raised interest rates for the first time in over 10 years (from 0.25% to 0.5%) - the first increase since July 2007.
If increasing your mortgage is a factor, ongoing speculation on further interest rate rises may dissuade you from going ahead with a move. Unless you are approved for a longer fixed-rate deal, increases in the interest rate put additional pressure on your finances, and can threaten your ability to meet ongoing mortgage repayments.
Unless you are downsizing, the stringent criteria now attached to mortgage eligibility may have a detrimental impact on your plans to move. Since the economic crash, higher deposits and lower loan-to-value ratios have characterised mortgage lending, leaving existing homeowners unable to move up the property ladder as freely as they would like.
During the property market boom pre-2007, 100% mortgages and lending multiples of five times a borrower’s income were commonly offered. But mortgage lending is now tightly regulated, and financial institutions are more reluctant to expose themselves to financial risk.
Have you considered selling your property at auction?
Although placing your home with an estate agent is often seen as the ‘conventional’ method of selling, it is not always the best way. If you do decide to sell your property, an alternative option is to use an established auction house.
Selling at auction offers certainty and is a secure way to move on without the danger of buyers dropping out, or you being stuck in a chain and reliant on other parties for a successful conclusion. Plus it can be over four times faster than selling with an estate agent.
The selling process has a fixed timescale, and you only deal with genuine buyers who have their finances already in place. According to the October 2017 RICS UK Residential Market Survey, the average time to complete a residential house sale is 18.5 weeks, compared to just 4 when buying with Pugh & Co.
Furthermore, winning bidders are legally-bound to the process, and must pay a 10% deposit before leaving the auction house.
This viable and increasingly popular option replaces what can be a prolonged and stressful selling procedure that does not always bring the expected rewards. Competitive bidding is often a feature of property auctions, and once a bidding war begins, prices commonly exceed those that can be achieved using traditional sales methods.
Pugh & Co can assist in the sale of your property. With vast experience of auction sales, and comprehensive knowledge of the property market, we will provide advice throughout to ensure you understand every stage of the process.
Selling your property at auction allows you to move on quickly, and take advantage of a tried-and-trusted process. Contact our experienced team at Pugh & Co to find out more information.
Written by: Paul Thompson on 3rd January 2018