Why now is a surprisingly good time to sell your home
Thu 02 Feb 2023
In the current climate of economic uncertainty and the challenges of higher interest rates, lower house prices and a lack of supply, the simple question for many in 2023 is: Should I sell my home?
We say now is actually a surprisingly good time to sell.
There is still a huge percentage of people who need to move; for a job relocation, a change in personal circumstances or perhaps to save on energy and bills.
"So, the market continues."
Henry Cockerton, Head of Residential
A quick overview of the market shows many fundamental challenges. The recent RICS report: What UK Housing needs to see in 2023 by Government outlines a lack of supply of housing, particularly affordable homes and also new builds with the original 300,000 annual target currently unclear.
This comes as developers have faced a series of challenges stemming right back to Brexit then coronavirus and now the economic crisis, a labour shortage and delays in the planning system all slowing down the house building process.
Then there are higher interest rates affecting people’s borrowing ability. The latest increase by half a percent is the highest rise in 14 years with a knock-on effect for those with mortgages, credit card debt and bank loans.
We are seeing some house price reductions as a result of all this instability. Price decreases are seen as a measure of just how well the domestic economy is doing and therefore directly affects the mood, confidence and often, the decision by home owners to sell.
The national average house price dropped 2.3% in November and 0.1% in December which put annual growth for 2022 at 2.8%, compared with as much as 9% in 2021.
Recent HMRC data cements this view by reporting agents sold 14.7% fewer properties last year than the previous year with other factors being the end of the stamp duty holiday.
Although the higher interest rate will affect the market, there are positive signs emerging with the Bank of England Governor indicating the UK may have turned the corner on inflation along with a shorter than predicted recession and a lower resulting rate of unemployment.
Fears were that house prices could drop by as much as 10% over 2023 compared with 2022 however we consider this to be exaggerated and we are buoyed up by the more positive predictions recently by Rightmove which stated average new seller asking prices rose by 0.9% in January, the biggest increase at this time of year since 2020.
Rightmove also reported a 55% increase in buyer demand in January, the biggest monthly bounce since 2016, which is a good sign for the coming months.
Henry Cockerton, our Head of Residential, based in Holt, said: “There is still a massive imbalance between supply and demand for high quality properties and activity will remain constrained by high mortgage rates and challenging affordability.
“However, HSBC, Santander and others have cut rates on hundreds of mortgage deals in January bringing average mortgage rates to their lowest in three months as the banks start to compete for reduced business. Many of last year's interest rate rises had been factored in by lenders meaning they did not, despite media reports, affect new mortgage products.
“However, mortgage interest rates are still expected to remain high throughout 2023. Inflation is likely to be past its peak, but is still expected to be above the 2.0% target at the end of the year with incomes falling in real terms.
“Independent economic advisory firm Oxford Economics predicts with the base rate at 4.0%, the first falls will not be until early 2024.
“However, the outlook is more positive now for 2023 than it was."
What does this mean for home owners?
"What does this all mean? The challenges for many people of borrowing the necessary funds and arranging a mortgage to move affects those trying to get onto the ladder and also people whose move is discretionary ie; they don’t have or need to but want to.
Mr Cockerton said: “Right now, moving house is not a lifestyle choice for many however those in rented wanting to buy their first home will be motivated because of the rise in rental prices and a real lack of supply of properties and an inflated demand from tenants.
“Those who can wait but are motivated to move because they need a house to better suit their needs; perhaps a larger home for those having a family or a smaller one for those deciding to spend more time abroad – they are committed to selling so it’s a matter of timing as they monitor the market over the next few months.
“Even taking those movers out of the market still leaves a huge percentage of people who still need to move; for a job relocation, a change in personal circumstances or perhaps to save on energy and bills.
"So, the market continues and evidence of that is some of the fabulous and varied homes we have for sale across locations and price ranges.
"Our Norwich office has just listed The Old Rectory, Swannington, Norfolk, a stunning Grade II listed country house built in 1635 by the former rector of Swannington, reputedly from the proceeds of the sale of manuscripts of the poet, George Herbert.
"The house was substantially enlarged in 1841 and carries a fascinating history being sold away by the church in 1968.
"We have Rockley House, Nottinghamshire, a fine Grade II listed country house in more than five acres for sale with our Retford office for a guide price of £1.2million.
"Our Lincoln office listed Rookery House, Church Hill, Washingborough, for sale for £999,999.
"In Norfolk, our King's Lynn office listed recently Olive Tree House, Chapel Road, Tilney Fen, for sale for a guide price of £670,000 and in Norwich, our New Homes division, managed by Mason Burrell, has for sale two homes in the Acorns, Flowerpot Lane, Long Stratton, both for sale for £385,000.
Developer of the Acorns, Ben Carver, of Branksome Homes, who has around 25 years experience building properties, said: "The market was challenging last year but one of the three properties is now sold and there has been some good interest with arranged viewings already this year on the other two."
Lee Shuardson, Residential Manager in our King's Lynn office, said: “We have had a very encouraging start to the year and a healthy level of viewings across all prices ranges, with especially good activity on higher value property."
So, for those thinking of selling it may be actually a rather surprisingly good time to do so, with less competition meaning more viewings and committed buyers all ahead of the spring rush."
Lee Shuardson, Residential Manager, King's Lynn
“Sales on larger period houses is strong and we are seeing renewed interest in property that has been on the market for longer. This may be down to less competition and fewer new instructions coming to the market coupled with the fact vendors acknowledge the market is weaker than it was and are more open to negotiate on price.
“Buyers in their thirties and forties are not as fazed by higher mortgage rates as we perhaps predicted and aspirational buyers are not in short supply and are also the most receptive to accepting their own houses may have reduced slightly in value.
"New homes continue to perform well as many offer energy saving features and are cheaper to run – appealing in the current economy.
“New instructions are down year-on-year but our valuers have very full diaries again which is encouraging news.
“So, for those thinking of selling it may be actually a rather surprisingly good time to do so, with less competition meaning more viewings and committed buyers all ahead of the spring rush."
New instructions are down year-on-year but our valuers have very full diaries again which is encouraging news."
Lee Shuardson, Residential Manager, King's Lynn
James Drabble, Residential Property Agent, Lincoln, said: “For us, 2022 actually mirrored 2021 as the demand for property in Lincolnshire showed no sign of slowing down.
“Prices have risen significantly in the last couple of years, but properties in Lincolnshire continue to represent value for money in comparison to most of the country, in particular the south.
“In 2023 we expect to hear from more homeowners who are looking to downsize because of increased energy costs. I also see environmentally friendly and energy saving features will become more popular in homes; such as ground and air source heat pumps, solar panels and electric car charging points.
“However, the property market operates in cycles with high and lows but life goes on and people will always need to move.”
For advice in selling and buying, please contact Henry Cockerton in Holt on 075900 41344, Lee Shuardson in King's Lynn on 07557 200346, David Hinton and Mason Burrell in Norwich on 01603 629871 and James Drabble in Lincoln on 07919 694225.
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