Mention your desire to move house this autumn, and it’s odds on that your friends and family will raise their eyebrows in front of you — and question your sanity behind your back. Sell or buy a property? Right now? With the economy imploding? You must be crazy.
Perhaps they have a point. The average two-year fixed mortgage has an interest rate of 6.43 per cent, according to the data company Moneyfacts. Meanwhile, Oxford Economics, a consultancy, claims that house prices are overvalued by a third and a crash is “likely”. Even the estate agency Knight Frank predicts double-digit price falls in the next 18 months.
Meanwhile, sellers have gotten used to calling the shots. Two-thirds will only sell to a chain-free buyer, and a third wait until they have three offers before they agree a sale, according to a survey by MPowered Mortgages, a lender. As the market turns, they may find buyers gain the upper hand.
If you do take the plunge, there are ways to ease the stress. Here we round up the hacks and facts that the shrewdest buyers and sellers will need during market mayhem.
Am I being reckless?
It may not be the time to flip a property and make a quick buck but if you intend to stay in your new home for more than five years house prices will more than likely recover any losses. The immediate calculation must be balancing rental costs against saving for a deposit and mortgage payments.
What if my lender pulls my mortgage offer?
“The lender may believe the circumstances under which it was willing to lend have changed, so it may be worth appealing. If that doesn’t work, there’s little to do but find a new lender,” says Claire Lipscombe of Finance Planning. An independent broker will know about all mortgage products and which ones are right for you.
Any other tricks to avoid mortgage problems?
You could exchange and complete on the same day — it’s difficult in a chain, but with two or three sales in a chain, it can work. Cox & Co, a Hove Estate Agency estate agency, recently did this with a buyer who was worried that a mortgage offer would be withdrawn if the transaction was slow. “It was very stressful for the elderly seller however, with great communication and advice, we made it possible and delivered the best outcome for both buyer and the sellers.
Can I sell to a cash buyer?
Good estate agents tease out the financial circumstances of buyers. Some 36 per cent of homes in the UK are owned outright, according to the Office for National Statistics. Buyers from this group are “hot to trot” despite the financial storms of recent weeks.
How can I plan to avoid Halloween hiccups?
The chancellor will make his fiscal statement on October 31, and an interest rate rise is predicted for November 3. “The Bank of England is expected to raise the base rate by about 1 per cent at its meeting, with rates forecast to peak at 5.5 per cent next year,” Clair Lipscombe says. “If you’re completing that week and want to change your mortgage now, a reassessment by the lender would be required, which would cause delays.”
I’m putting my home on the market now, any advice?
There’s the usual: declutter, touch up paintwork, complete DIY jobs and make sure the garden is neat. So far so predictable, but you could do more now that the market is in favour of buyers. If you want to understand how to make your home or property more appealing please do contact Marc Cox from Cox & Co Hove.
Are estate agents geared up to sell homes in a buyer’s market?
Not all of them. Some accustomed only to the easy sales landscape of recent years list a property on the property portals then kick back, waiting for inquiries. In a buyer’s market a seller should choose an agent with the experience to do “sales progression”, that is, get on the phone to chase possible buyers rather than assuming they will come to them.
Should I put in a low offer?
There’s no science to this, but intelligence on the market and the seller’s circumstance is never more critical than in a market that’s on the turn. Right now, most sale completions (which show the position some months after the offer is made) are 2 per cent to 5 per cent below the asking price, according to Cox & Co. These figures may change in the coming months if buyers keep the whip hand. Likewise, if you discover that a seller needs to move quickly, for a job or because of a divorce, say, or because they are in debt, they are more likely to accept a lower offer.
Negotiating is not my strong point.
That’s a shame because buyers with brass necks may get the best deals over the next year. When choosing an Estate Agent to sell your property, ask them for their help and advice regarding your purchase, as they are the experts in negotiation. Marc Cox and Cox & Co say they will help and advise all of their sellers when it comes to them buying their dream home, as the two are intrinsically linked.
Can I fix a price for my removal company in advance?
“A company may want a hefty deposit to fix any quote, and that’s usually based on giving a set day for a move, which is always difficult to guarantee with the vagaries of our conveyancing system,” Midweek or early week house moves are often cheaper. According to the removal company Mills Removals, those days are more likely to have availability than ever popular Fridays.
