People tend to put their homes on the market when they are ready to move out of a certain neighbourhood or into a property that better suits their needs. However, in order to determine what the best time for selling your home is, you should take into account more than your own needs according to our estate agents in Newham. The way the prices are shifting and the market trends are developing should also be high on your list of things to consider.
Our experienced estate agents in Newham make it their mission to support clients every step of their selling or buying journey. If you are interested in selling your property or buying a home, contact them today at 0207 055 0441 to get professional advice and guidance.
What you can find in this article:
- What Do the Numbers Say About the Property Market?
- What Makes This the Best Time to Sell?
- What Does This All Mean if You Are a Buyer?
What Do the Numbers Say About the Property Market?
In the last few years, the UK property market has been even more dynamic than usual. However, things appear to be slowing down.
In fact, in June, the average UK property price has only risen by 0.1% compared to May 2022 and the quarterly growth of property prices was only 1.4%, the lowest since March 2021. Compared to April last year, the average property price has increased by 8.4%.
In London, property prices have shown a modest price growth compared to last year, of 3.9%. The average property price in London today is £516,000.
If you want to find out how much your home is worth right now, contact our estate agents in Newham today for a free valuation at 0207 055 0441.
Our estate agents in Newham are also noticing a rise in the number of days required to sell a property in the UK. It now takes, on average, 22 days from the time the property is listed to get the transaction completed and have it sold. For London, the average time it takes to sell a property today is 35 days.
In March, this average for the UK was 20 days.
All of this data seems to indicate that the market has finally reached the peak of price growth and is returning to normal. Our estate agents in Newham point out that ‘normal’ still means that demand is highly outweighing supply. Still, prices are not growing as fast as they did in the past two years.
One effect we are seeing given these new numbers is that there is an increase in listings where the property price has been reduced. It is 5% for this May compared to 4.7% in April 2022.
The average price reduction may not sound like much being at 9%. On the other hand, if you apply this to the average property price, you get a discount of almost £23,000.
That said, if you are planning to sell your property, these numbers should not be seen as bad news necessarily. They should be an indication that you must act soon, though.
According to our estate agents in Newham, property sales are still 21% above the five-year average. Therefore, buyer interest is still very high. Putting your home on the market now means you can still benefit from the effects of the boom and capitalize on buyer interest and the high prices.
What Makes This the Best Time to Sell?
Mortgage rates are significantly rising. They are at a 10-year high and are estimated to keep climbing in the coming months. So is the cost of living.
Add to this the not-so-optimistic outlook on the economy and the impending recession everyone keeps talking about and you can see that, even though demand is still high, the market is preparing for a correction.
The Bank of England has been consistently raising interest rates attempting to fight inflation. But what do higher interest rates mean for house prices?
Higher interest rates mean that the average borrower will have to face higher annual costs. In December, the average mortgage rate was at 2.64%. It is now 3.37%. For a fixed-rate 5-year loan of £250,000 with a 25% deposit, this means an £870 raise in annual costs.
If mortgage rates rise to 4.62%, the annual cost of a mortgage repayment will increase by £2,500 compared to December 2021.
This significant rise may price out many buyers and make them decide to put off buying a home, which will decrease demand. Once demand decreases, the average prices will soon follow.
On the other hand, the Bank of England has announced they are relaxing the mortgage affordability rules and no longer requiring borrowers to prove they can afford to repay their loans at 3% above the Standard Variable Rate. This means that additional borrowers will be accessing loans, especially first-time buyers.
If you are a seller, this is the time to consider listing your property. For the rest of the year, house price growth is estimated to be around 3% while demand is not estimated to decrease significantly.
However, if you postpone your decision to sell until next year, you will face uncertainty and risk selling the home for less than you could get for it now.
What Does This All Mean if You Are a Buyer?
Reading the data and gloomy predictions above as a buyer, you may be wondering if perhaps this is a smart time to decide to delay buying a home.
However, our estate agents in Newham recommend you don’t put off buying a property and instead buy now. The main reason for this is that, even though the market is preparing for a correction, prices will continue to rise this year. This means that with each month that passes, properties are getting pricier and pricier. Even though this increase is showing signs of slowing down, it is still an increase.
With borrowing becoming more expensive and costs of living rising, you should make a move now and close on a fixed-rate loan that will safeguard you from future market changes.
If you are looking to sell a property in East London or you want to buy a home, our experienced estate agents in Newham are ready to assist you. Call us today at 0207 055 0441 to get the best advice and professional support.