Nick Churton of Mayfair Office considers opposing forces that are affecting the property market this spring.
The post-Brexit property market is turning into a paradox. With low interest rates, declining numbers of unemployed and an economy that appears to be on a strong path of sustained improvement things should be booming. Confidence, the lifeblood of the property market, should be surging though its heart, pumping up prices as the numbers of available properties dwindle. It should be the classic sellers’ market. Except it isn’t. Why?
The answer is that confidence is muted. Concern over Brexit is a factor. So too are the criteria needed to get a mortgage nowadays. Also there is mounting caution over major spending decisions and heightened house price-to-earnings ratios. With rising inflation affecting household incomes, house price rises could be suppressed and in some areas even reversed this year. House prices will reflect growth in households’ incomes much more closely this year rather than outstripping them.
So who does one turn to when the going gets tougher, when selling is harder and when finding a great buyer can’t simply be left to the internet (as if it ever could)? Like most things in life when you need someone to show you the way it is best to find someone who has been along that particular road before.
So if you are selling your home in 2017 here are some important points about this current market that experienced estate agents understand only too well.
- Don’t believe everything you read in the press. The media is invariably three months behind the market and the national newspapers cannot reflect local market conditions that can swing wildly from county to county and even town to town. But while conditions in some areas might be better than expected, in others there are growing challenges.
- First time buyers should take advantage of this period while investors are still reeling from stamp duty hikes.
- Those at the upper end of the market should understand rapid changes in taste, income, lifestyle and generational requirements within the modern family unit. Buyers’ needs are not the same as they were a decade or two ago. These changes affect desirability, suitability and affordability.
- Be prepared to be flexible on price and timing. This positive attitude will bring material benefits as well as peace of mind. Or you can dig your heels in and be miserable.
- What one loses on the swings one gains on the roundabouts. Price corrections work both ways – on the sale and the purchase. 2017 could be a great year for finding a property. But selling may be a challenge. In property one thing is sure: one rarely wins out both ways! Be realistic.
- Finally there is no reason why a property that is well presented, in good order and priced correctly should not find an eager buyer. But the right advice is crucial from the start.
- Start planning your 2017 sale early. Don’t wait. In market terms there is little to wait for.
- Remember that property values have risen over the past few years so even a negative correction in prices will have little real effect on those who have owned their property for over three years or so. The notion of losing out is uncomfortable to anyone, but experienced movers understand they have to ride the ups and downs.
- Use an experienced professional to show you the way. Fee-cutting or online-only estate agents can be very attractive to the uninitiated, but don’t be beguiled. You get what you pay for. In this market a wise seller needs sage advice based on experience and know-how. Sellers will need the services of those who offer their clients skill and candour as well as respect - not the scant attentions of those who regard other people’s homes simply as fee-generating units of residence, or as another tick on the office dry-board score sheet. If you are selling and don’t just want to be a number make sure you get market appraisals from several reputable local estate agents and be certain to ask each one how long they have worked in the area. Also ask if they have worked through several market cycles and, most importantly, what they learnt from them.