Selling My House in the Current Market
If you’re selling your house, or if it’s been up for a while and still hasn’t sold, you’ll probably have a number of questions…
- Is my house priced correctly?
- Should I drop the selling price?
- What’s going to happen to house values in my local area?
- Maybe I should take my house off the market?
- Should I look for another house if mine hasn’t sold?
- How can I sell my house quickly?
Property Solvers spend many hours every month helping homeowners answer concerns about selling their house.
There’s never a ‘one size fits all’ approach.
We always assess each situation on its own merits with the aim of getting people the best outcome.
Will The Value of My House Go Up or Down?
Unfortunately, there’s no simple answer here…
We usually start by encouraging people to take a ‘birds-eye’ view of what’s happening in their local housing market.
Buyers sentiment, supply/demand, the desirability for houses on your street and a range of other factors can all influence what can happen with a sale.
The good news is that it’s never been easier to check house prices in your area for yourself.
At the same time, we would encourage you to not get too caught up in the detail and end up in a state of ‘analysis paralysis’.
Sometimes, simply taking some action will help you sell your house.
Be Realistic About the Value of Your Property
We have long realised that working out a property’s fair valuation is not an exact science.
Homes on any given street can vary hugely in terms of size, age, character etc.
For example, it would be fair for you to ask for a higher price if you have a larger garden, floor space or have added an extension.
The level of quietness and proximity to good schools, shops, transport, healthcare and other essential services also come into play.
However, whilst the technology to track house price data is improving, your selling price may be open to debate.
You may find one estate agent saying ‘you could get more for that with me’, and then another saying ‘I think it’s priced way too high.’
It’s frustrating, we know!
Our advice is to use the data that’s out there plus some common sense to get to a realistic value.
Of course, speaking with knowledgeable estate agents is important.
But be wary of those that overprice property and raise expectations to win your business. You’ll find that the end result is often disappointing.
UK House Prices (as at October 2019)
Property prices cannot be looked at through one lens.
For instance, since the 2007-08 recession, values across Greater London and the South East grew massively – which wasn’t the case in much of the North and the Midlands.
Yet, tracking five of the main house price indices, the graph below shows that average values always have grown steadily since the start of the century:
Most commentators agree that the market will be slow as we move through 2019.
There may even be some drops in certain areas, especially London, but nothing like the crash of 2007/08.
Mortgage interest rates will stay reasonably low meaning that buyers will be less afraid to make higher offers for your house.
It’s also well-known that there is an undersupply of housing which is keeping prices up.
Although the government’s Help to Buy scheme has been criticised for not attending to the right people, its continuation will support house price growth.
On the flip side, there are a number of reasons to not be so cheerful…
More and more young people find themselves pushed out of the market (especially in the south).
Although the government removed Stamp Duty for first-time buyers, the deposit youngsters have to put down these days is often well beyond their means. The majority cannot get help from the ‘Bank of Mum and Dad’.
Many observers think that prices need to drop to make things fairer.
Then, of course, there’s the unavoidable question…
Will Brexit Affect House Prices?
Again, this isn’t an easy one to answer.
We all hope for more clarity on our future relationship with the EU but, with the endless political wrangling, this often feels like wishful thinking.
As a result, it’s more likely that a certain degree of economic uncertainty will remain as the country makes the transition.
When it comes to the direction of house prices as a result of Brexit, nobody really knows.
From a broader standpoint, we plan to pay close attention to the value of the Pound (£).
Should it weaken and fuel inflation (especially in a ‘no-deal’ scenario), the Bank of England may be forced to raise interest rates.
These would then filter into the mortgage market and slow things down as buying won’t be so easy. Those on variable or tracker mortgage rates will also feel the sting of higher monthly outgoings.
Some of the telltale signs of a slowing market in your local area include:
- More FOR SALE than SOLD signs;
- Fewer properties updated as SOLD Subject to Contract (STC) on the main portals (you can also check the date they initially went to market);
- Tools like the Property Log Chrome extension and our own local house market insights pointing to downward price trends;
- Estate agents sounding negative about the market or saying that ‘everything’s fine’ when they have lots of unsold properties on their books;
- Evidence of falling prices registered at the Land Registry (we would recommend using the Rightmove sold house price tool or the Land Registry’s House Price Index itself to check this).
If your house is on the market and not getting much attention, you may struggle to sell if you’re not willing to negotiate.
Alternatively, it may make more sense to keep hold of the property, especially if you can cope financially.
Indeed, more people have also been extending their homes, especially when they have Permitted Development Rights (PDRs) and don’t have to seek full planning permission to do so.
If you’re not a landlord, you may want to skip this next section by clicking here.
Selling My Rented Property
In recent years, Property Solvers have been speaking to more landlords asking: ‘should I sell my house given all the challenges facing the buy-to-let sector?’
The response we provide really depends on individual circumstances.
For example, some are simply looking to release built-up equity for personal reasons.
If there’s no major rush, we usually suggest refurbishing the property to get the maximum value (although it’s worth using our calculator to see whether it’s easier to sell ‘as is’).
But for the others, the onslaught of legislation and regulation hitting the sector in recent years has meant that a more urgent solution is required.
The most notable pain point facing many landlords at the moment was instigated by former Chancellor George Osborne…
Section 24 of the Finance (No. 2) Act 2015
Section 24 (sometimes referred to as Clause 24) is a piece of legislation that effectively taxes landlords on their revenue, not their profits.
In 2019, the screws have been getting even tighter. Landlords are only able to deduct 25% of their mortgage interest costs against gross rental income.
On the bright(ish) side, there will be a mortgage cost credit of 20% applied – even when the full force of the legislation is rolled out in the 2020/21 tax year.
Also, the impact of any tax change will only be felt in the following year (when the tax is owed to the HM Revenues & Customs). So the tax for the financial year 2019/20 will be due in January 2021.
At most risk are the landlords who have high levels of secured debt against their properties as well as those in the higher tax bracket.
Taken from our guide to selling a tenanted property, the table below assumes that Landlord A and Landlord B own very similar properties.
The values of both rental properties are £100,000. With a rent of £600 per calendar month, the gross yield is 7.2% at the point of the full effect of Section 24 in 2020/21.
You can see that Landlord B, as a higher rate taxpayer, will incur a 50% decrease in net profits once the legislation is fully in place.
The above assumptions also do not factor non-mortgage interest costs such as voids, legitimate running expenses and other holding obligations.
These overheads will still remain fully tax-deductible against gross rental income (revenue).
Other Landlord Risks in 2019
Section 24 comes part of a broader array of top-down measures that are making the average landlord’s life more difficult.
The Prudential Regulation Authority (PRA) stress-testing criteria, for example, is placing further controls on the amount of mortgage finance a buy-to-let landlord can secure against a property.
Combined with higher stamp duty rates to acquire buy-to-let properties and more omnipresent regulation, the barriers to entry have never been higher.
If you are thinking about selling, however, make sure you seek suitably qualified advice from an experienced tax advisor beforehand.
Sell My House Quickly For a Good Price
Going through the house sale process is stressful and frustrating – especially if you’re in a rush to get things sorted.
But always remember that you are always in the driving seat. You ultimately don’t want to make any decisions you’ll regret down the line.
Should You Use a Quick House Sale Company?
The reasons that you may be thinking of approaching a quick house sale company may include:
- A need for a quick completion on a set date;
- A buyer has pulled out (broken chain) or there’s concern about the certainty of sale;
- You have mortgage arrears or you’re being threatened with repossession (see our repossession guide here);
- Your property is in a bad state and will struggle to sell on the open market;
- There are underlying legal issues that put off most buyers;
- The estate agent you’re working with is doing a bad job;
- You’re looking for a clean break and want to keep the sale private.
Much will therefore depend on your own situation and how urgently you need to sell. But fast house sale companies often work well for those who want to deal with a serious buyer on a one-to-one basis.
Here links to other blog posts we’ve put together about selling your house quickly:
- Sell Your House Quickly with Property Solvers
- Selling Your House Quickly – 7 Real Options
- Sell House Fast – Beware of the Scams
- How to Sell Your House Quickly [101 Tips]
- Fair Treatment When Selling Your Home Fast
Sell My House Quick – Know Your Options
Decent quick sale companies will always take the time to listen carefully to your situation. You may be in a rush, but always take the time to carefully consider your options.
For example, you may want to look into the following:
Sell My House Fast to Property Solvers
As full-time and experienced professionals in the industry, we pride ourselves in having a detailed insight into the market. This means we can help clients achieve what they want and, in most cases, find a suitable solution during our first phone call.
Considering the growing evidence of scams, we are also very keen to differentiate ourselves from others in our industry.
Anyone who contacts us will receive honest and up-front assistance before we even mention how we work as a company.
For a short introduction to how we work, check our introductory video below:
Please call us anytime for a friendly, no-obligation chat. Our freephone number 0800 044 3733 is open 24 hours, 7 days a week.