Us Brits are obsessed with the state of the housing market and love to dissect every twist and turn and regional variation. The mainstream media knows this of course, often creating quite different and dramatic headlines and stories from the very same just released house price data, playing up the highs and lows, because of course, sensation sells! For those considering buying or selling in West Devon however, this (often conflicting) information can create a lot of confusion and have you asking yourself all sorts of questions, with often at the top of the list. Of course there is no ‘one size fits all’ answer to that question, as everyone’s situation is different, but , to hopefully help you make a more informed decision.
Us Brits are obsessed with the state of the housing market and love to dissect every twist and turn and regional variation. The mainstream media knows this of course, often creating quite different and dramatic headlines and stories from the very same just released house price data, playing up the highs and lows, because of course, sensation sells! For those considering buying or selling in West Devon however, this (often conflicting) information can create a lot of confusion and have you asking yourself all sorts of questions, with ‘when is the right time to sell or buy?’ often at the top of the list. Of course there is no ‘one size fits all’ answer to that question, as everyone’s situation is different, but we’ll get into some of the things to bear in mind in this article, to hopefully help you make a more informed decision.
What is happening in the housing market?
When it comes to how the current market is performing, there are two ways to look at it. If you compare today’s market with the hot market a year ago, things look a bit bleak – house prices are no longer rising as steeply, and the very low mortgage rates we got accustomed to are off the cards for now. But if we compare conditions with the pre-pandemic years when things were more stable (which is better for everyone), the outlook is a bit brighter. According to Zoopla, in their February House Price Index, ‘Buyer demand and sales volumes are 20%–50% lower than a year ago but slightly ahead of the pre-pandemic years (2017–2019).’
Richard Donnell, Zoopla's executive director of research, said, ‘Housing market activity has rebounded in line with pre-pandemic levels. Sellers are having to give up discounts to achieve sales, the value of which equate to a third of the price gains made over the pandemic.’ This suggests that there has been a ‘nationwide repricing’ due to the reduction in buyers and the increase in mortgage rates at the end of last year.
Richard Donnell also stated, ‘Working from home, increased retirement, and high immigration all continue to stimulate demand to move home’ with Zoopla adding, ‘The housing market is adjusting to higher mortgage rates better than many had feared and it’s welcome news to see more rates for new buyers now in the 4%–5% range and even lower.’
While there are always market factors which may influence the timing of your move, these can be far outweighed by the many personal factors influencing your ‘right time’, such as a new school for your children, a job relocation or a need to be near elderly parents. Whether you find yourself in a situation like this or not, it is helpful for all of us to bear in mind that there will always be these ‘non-discretionary’ moves providing the baseline to the property market.
The more discretionary the move (and its definitely a spectrum vs. black and white), the more the timing will feel influenced by market factors, and it’s these where being informed regarding the local property market is key.
Should you sell a home?
Falling house prices aren’t always the end of the world; even with the drop this year, the average value of a UK home is still currently £46,000 higher than in March 2020, according to figures from Halifax. When you look at the bigger picture, even if prices fall by the suggested 10% this year, they could simply return to where they were 12 to 18 months ago.
Perhaps you initially considered the generally falling house prices as a reason not to move now, however bear in mind that the house you will be moving to will also be falling in price, and therefore it’s a great time to upsize.
The key to successful selling in a market like today’s is to ensure you work with a professional who is prepared to tell you what you need to hear vs. what you want to hear. Don’t be tempted to work with those that may promise a high selling price in order to win your business – your home will not be competitive with others on the market, and may go ‘stale’. Sellers who build a strong relationship with their agent and price for today and tomorrow’s market vs. aligning their asking price with sales that were agreed a few months ago will attract interest from motivated buyers and ensure the optimum price is achieved. Staging your home is of course something we advise all our clients to do also, to allow your home to wow from the online listing, and appeal to the widest possible pool of buyers.
Should you buy a home?
One thing that all bodies can agree on is that house prices in 2023 will fall. Many blame this on the high mortgage rates and the cost of living crisis. After the years of rapid increases in sales prices, this could be music to the ears of many buyers; by how much they will fall is up for debate, with Savills forecasting a 10% drop, whereas Rightmove suggests a more conservative 2%. Either way, any magnitude of decrease means that you are getting more house for your money vs. a year ago, and potentially a great reason to buy now.
Although property prices may be lower, in contrast, mortgage rates have definitely increased recently, although they are still not high by historical standards, putting pressure on borrowers. Andy Haldane, the former Bank of England chief economist, said last year, ‘We have a whole generation of mortgage holders who have scarcely seen a rise in interest rates. It will be a massive shock to the system.’
For borrowers, increasing the deposit you put down on a home will open up a wider range of mortgage options, so this is definitely a strategy to talk to your financial advisor about if applicable. Cash buyers have increased slightly the advantaged position they hold in the market, given the increased uncertainty associated with borrowing at the moment, so if you are a cash purchaser, you will be looked upon very favourably by a seller, and so now might be a great time to buy.
Do what’s right for you
As we mentioned earlier, unfortunately there is no single answer to the question ‘when is the right time to move’, especially in these changeable times, and in the end it will be a decision that only you can make.
We hope however that this article has provided some food for thought, and we are more than happy to chat through your personal situation with you over a cup of tea in complete confidence and with no obligation, if that would be helpful. Give the team at Miller Town & Country a call on 01837 54080 (Okehampton area) or 01822 617243 (Tavistock area).