So, the decision has been made – you are selling your house! But what is happening with the housing market? Is it worth even considering putting your house on the market?
To help you answer these and other questions you may have relating to house sale, we looked at what property experts say – credit to which.co.uk.
According to the Land Registry in March 2022 the house prices rose by nearly 10% year-on-year. Yet, property experts believe the further rapid rise is very unlikely.
There was the whole year of soaring prices and fierce competition between buyers, but now house price growth seems to be slowing and the property market is settling down.
In 2021 sellers received a great number of bids and were offered 20% higher than asking price. This busy market has been influenced by home buyers who raced to lock in cheap mortgages before interest rates rose. At the end of 2021, the average rate for a two-year fixed-rate mortgage with a 25% deposit was 1.29%. By April 2022, it was 2.35%. This was the sharpest increase in rates over any six-month period since the end of 2003, according to Pantheon Macroeconomics, a research group.
Rates will continue to rise further. In May, the Bank of England raised the Bank Rate to a 13-year high of 1% and more are on the way. Rising mortgage costs will hit house buyers at probably the most difficult time for them when they are still adjusting to the cost of living crisis. This will quickly depress demand.
Centre for Economics and Business Research (CEBR) forecasts that the prices would flatline between April and June before falling between July to September, by around 2%. In the last three months of 2022, the fall will be 3%.
Because annual house price growth at the start of the year was so high, home values will still be 5.4% higher year-on-year by the end of December, but the prediction is that they will fall by 2.9% over 2023.
CEBR’s forecasts are based on the Bank Rate hitting 1.5pc by December 2022. But as inflation forecasts continue to increase, larger increases could be in the pipeline. Capital Economics, another consultancy, expects the Bank Rate to be double this, at 3%, in 2023.
Prices are cooling. properties which were being sold off market in West Sussex for £3.5m in January, at the beginning of May were offered for £3m. This price could be negotiated more. Twelve months ago it was almost impossible. So, leading property experts advice that if you’re thinking of selling in the foreseeable future, you want to sell now!
The surveys run by High Street Property Agents revealed that more people are selling NOW. There has been a noticeable increase in the number of available properties since the interest rate rise. That is partly because it is traditional to sell a home in spring and summer. But there are some houses that were off market until the autumn, and are now listed. A lot of people are waking up to the fact that this is probably the best time to sell.
More sellers are expected to enter the property market over the next few months. They are keen to lock in deals quickly before mortgage costs rise. According to property experts, the median time from instruction to an offer being accepted is now just 56.5 days in April – the shortest length since June 2021.
These experts noticed that the property supply is now significantly higher than it was earlier in 2022. South West is one of the regions, along with the Midlands and London, which supply is now moving faster than demand.
The current property market is ideal for those who want to downsize. They would be selling at the peak market and would likely buy in cash – and be unaffected by higher mortgage costs, allowing them to negotiate harder on price.
Sellers who are upsizing, however, will be stretching themselves financially just as mortgage rates are increasing and house prices are expected to fall.
Home movers with larger deposits will be protected from falling into negative equity. But home buyers have been racing to lock in long-term mortgage deals to protect from having to remortgage in an even higher interest rate environment further down the line.
At Houso, we want to make the process of buying and selling homes smooth, easy, and allow you to take control of your listings and negotiations – our off-market capability let’s you test the water and sell your home without listing it on the market.