The housing market in South London is changing. While sales volume has returned to pre-pandemic levels, lending is down significantly. This suggests that buyers are becoming more cautious and are relying on higher deposits to fund their purchases. Where is this money coming from? Well, bank of Mum and Dad of course. But as they remortgage their house to gift deposits or withdraw from pensions they are running out of funds! "It's a worrying time for the housing market, as rapidly rising mortgage rates mean fewer people can afford to buy for the first time or take the next step on the ladder." - Kimberley Gates, Head of Corporate Partnerships at Sirius Property Finance.
On the face of it this is good news for buyers, as it means that they have more bargaining power. Sellers are more at the mercy of buyers' affordability. However, it is also a warning to homeowners who are looking to sell their property. If you price your property too high, you may find that it sits on the market for months or even years. Well, surely you're sensible enough to realise if you haven't sold it within 3 months then something is wrong...
Sense over Cents (or pence)
So, how can you price your property sensibly? Here are a few tips:
- Start by getting a valuation from a qualified real estate agent (like me). This will give you a good idea of what your property is worth in the current market. You can also use an online tool just to give you a rough guide as a start.
- Be realistic about your expectations. The housing market is not what it was a few years ago. Buyers are more cautious and are relying on higher deposits. Are you selling a 1bed at 400k? with a 25% deposit the buyer would be borrowing £300k at 5.5% or thereabouts which is £1843 per month! That's excluding any moving costs and finance and legal fees... I'm sure you'll agree a 1bed doesn't cost £1843pcm to rent, and when they're renting Mr. Landlord pays for repairs. An intriguing proposition!
- Be prepared to negotiate. If you price your property too high, you may have to negotiate with the buyer. Be prepared to compromise on the price or on other terms of the sale. be happy they've made an offer as getting people through the door is hard work when the price is too high.
On the valuation side be advised that an agent will be pricing your property through a buyer's eyes...
- The location of your property is important. Properties in desirable areas will sell for more than properties in less desirable areas.
- The size of your property is also important. Larger properties will sell for more than smaller properties.
- The condition of your property is also important. Buyers will be more willing to pay a premium for a property that is in good condition, one that they don't have to do anything to.
- The features of your property are also important. Period features such as coving, fireplaces, stained glass etc. Your agent will be photographing these for the lifestyle shots.
So in summary - price sensibly to get people through the door. A sealed bids situation is much better after an open day than tumbleweed and nobody turns up, and in my experiene the latter happens when you price too high. Free valuation here, have a look what AI tells you and then get a second opinion!