Well it’s been a little over a month since our last post, mainly because with all the rain in May we diverted our attention to building an ark, only to finish it on the 26th May just in time for the sun to come out and rumours of a heatwave to start circulating.
Fortunately our insight into the national property market has remained clear and we’re seeing many of our predictions at the start of the year coming to fruition….which is nice….but what of the next 6 months?
As we near the deadline of the stamp duty holiday we are seeing many solicitors creaking under the strain of demand from buyers who want their sales through in time. Some buyers are talking of renegotiating their offers to account for the fact that they may now end up having to pay stamp duty. Given the rising price of property it would be an unwise buyer who chooses to pull out of a deal or renegotiate their offer based on having to pay stamp duty.
With conveyancing times getting longer and longer, coupled with rising prices, it is likely a vendor would simply put their property back on the market and quickly get more for it than they had already agreed. The buyer would then be left having to find somewhere for a higher price AND pay stamp duty anyway. All that said, it would seem sensible to relieve some of the stress and pressure by allowing those who exchange contracts to benefit from the discount when they finally complete.
Selling In A Rising Market
You may have seen the Facebook adverts we run offering a same day property valuation. These invariably attract various comments ranging from accusations that we want to force people to move to Spalding (we have never said that 😊 ), that we are some sort of discount home-buying service in league with the devil (we’re not either of those things) and that it makes no difference if you sell when property prices are rising because it is all relative (not true).
Selling in a rising market is better for a number of reasons and we’ll detail them here. Firstly, any transaction involves negotiation and the party with the upper hand is always the one that is more willing to walk away. In a rising market that is likely to be the seller, in a falling market it’s the buyer. If you are a vendor and you know that there is a strong likelihood you’ll get other decent offers in the next couple of weeks, you are more likely to push for a better price. The buyer knows that they are in a weaker position and the seller knows that the buyer knows that they know they are in a weaker position! 😊
Secondly, if you live in a property that needs nothing doing to it, you have a chunk of unused equity sat there and you fancy a change, a rising market is a good time to get the maximum amount of money out of your property and find something that needs work. If you’re lucky enough to have a HUGE amount of equity, this could even turn you into a cash buyer, giving you more leverage when it comes to purchasing property. Why would you wait until the market starts to cool and see your ambitious home renovation plans slowly dwindle to a pipe-dream?
Thirdly, not all areas are equal. If the pandemic has shown us anything it is that life without a bit of your own outdoor space can quickly become unbearable in such times. Combined with a move away from cities as homeworking becomes a permanent change for many, prices in the less densely populated regions are rising more than those areas within cities (as we predicted back in January). Properties that have good sized gardens are also seeing huge demand. Anybody who had plans to move further South and nearer to a city for whatever reason, could find that their money goes further now than it has done for many, many years.
The next 6 months
The vaccination roll out will see most of the population having had 2 doses soon, meaning the re-opening of the economy is sustainable, rather than the national okie-cokie in and out of lockdowns that we’ve experienced so far. People will come off furlough in September which for some will mean the ability/confidence to get the mortgages they want, whilst for some it will sadly mean unemployment and a need to sell.
Mortages requiring just 5% deposit will continue to be available and with many having used the past 18 months to save, we will see demand for property continue to rise with more likelihood of that demand being met. Price rises will continue but perhaps not at the pace we have seen recently.
Looking even further ahead it could be possible that a post-covid “bounce” starts to wear off into the second half of 2022 and we return to single digit price growth or indeed little growth at all as we enter 2023 if interest rates start to rise to cool the market. We shall see!
If you want to have a more specific chat about your property marketing options in the coming month, please give us a call or send an email. We have local agents who will be able to give you advice that is specific to your local area.