When’s the best time to sell a house?
The best time to sell a house is something many homeowners are currently considering. It’s been well documented that the last 12 months have seen exponential property price growth. In fact, house prices have risen by more than 10 percent; the most they’ve grown in 15 years. So, is now the best time to sell?
In this guide
- What is a property bridging loan?
- How does a bridging loan work in the UK?
- How much does a bridging loan cost?
- How high is a bridging loan interest rate?
- How to get a bridging loan?
- Are there many bridge loan lenders?
- How long does it take to get a bridging loan?
- Are bridging loans for a house purchase a good idea?
- Is there an alternative to a bridging loan?
The UK property market 2022
Many industry experts predicted that the end of the recent stamp duty holiday would result in a price correction within the UK property market. The argument was that the stamp duty measures had simply delayed the inevitable and artificially over-inflated the market.
Very few people foresaw the continued growth the market has experienced in the last few months. A shortage of properties coming onto the market, combined with continuous strong demand from buyers, has created a hot market with stiff competition for each newly listed property.
What will happen with house prices over the next year?
The UK property market has defied most expert predictions over the last two years, so it’s difficult to say what the next 12 months will hold. Logic would say that prices cannot continue to rise at the rate they have been, and January 2022’s smaller price growth of 0.3% would seem to confirm that assessment. However, demand for properties remains high, so that strong desire could keep prices climbing for a little while yet.
There are several factors that will work against substantial price growth in the coming year. These include:
- Rising inflation
The cost of living is increasing sharply. Inflation is due to reach over 7% by the Spring, thanks to the rising cost of fuel, clothing, food and utilities. This will have a significant impact on buyers’ affordability when it comes to buying property.
- Rising interest rates
In an attempt to stem the rise in inflation, the Bank of England has already increased its base interest rate and the rate is predicted to rise further throughout this year. That means mortgage interest rates will rise and buyers are likely to be able to borrow less than they have been able to previously.
- Salary stagnation
With both the cost of living and interest rates rising, most households are starting to feel the pinch. Salaries are not rising to keep up with inflation, so every household is likely to be significantly worse off in 2022.
Each of these factors would indicate that price growth will slow significantly over the next 12 months, and we may begin to experience a price correction.
Is a property boom the best time to sell a house?
There are pros and cons to selling a house during a property market boom. Much will depend on your onward plans.
If you are selling a property and not planning to immediately buy another, there is no question that selling at the height of the market would be a good move for you. During a market boom there is strong competition for each property and prices are likely to be unusually high. This would be a great solution for those selling an inherited property or a former buy-to-let.
If, however, you are planning to buy another property at the same time, it’s important to think through the implications of buying at the height of the market. Would you find yourself in a difficult financial position if property prices were to fall significantly?
Pros and cons of selling your house now?
There will be pros and cons to selling your house at any time. These are some things you might want to consider if you’re thinking about selling your property soon.
- Current property values mean you’re likely to achieve a good price for your home.
- Demand is currently high for properties. Competition amongst buyers will ensure you get the best price possible.
- Properties are selling quickly.
- Although interest rates are due to continue rising, at the moment there are still a large number of competitive mortgage products available.
- If you are buying another property, you’ll be buying at the height of the market and may experience a drop in the value of your property in the coming years.
- You will be competing against a lot of other buyers for your next property, if you’re buying, and other renters if you’re planning to move into a rental property. This means you could find yourself over-paying for your next home.
- With the cost of living predicted to continue to rise over the coming months, you’ll need to think carefully about your affordability to avoid over-committing and getting yourself into financial difficulty.
What’s the best time of year to sell a house?
Traditionally, Spring is a very popular time of year to sell a property. Christmas is over and done, but the summer holidays are still a way off. Those who started talking about moving at the start of the year have spent time preparing their property and are now ready to list it, which means Spring is traditionally a time for strong demand and strong supply.
Another popular time of year to sell is the Autumn. The start of the new school year will get parents thinking about being in the right area for school catchment, and those without children may use summer breaks to think about their goals and plans for the coming year.
Summer and Winter are traditionally not the best times of year to sell because buyers are likely to be distracted with other plans.
Top tips to improve your chances of success if you want to buy now
The bridging loan industry is growing. There are currently more than
Your approach to buying a new property will need to be a little different in a highly competitive market. These top tips will help you to improve your chances of a successful purchase.
- Make sure you’re well prepared
Before you book any property viewings, it’s important to be as prepared as you can be. You should have an Agreement in Principle in place with your mortgage provider for any lending required, and have ‘proof of funds’ readily available for your deposit. If your deposit is coming from the sale of an existing property, it is likely that the estate agent will expect that property to be sold subject to contract before conducting a viewing. In a competitive market most sellers will only allow viewings from proceedable buyers; those who are chain-free, first-time buyers or those who have already accepted an offer on their current home.
- Know what you’re looking for and do your homework
In a competitive market, properties sell quickly. If you want to boost your chances of securing the right home, it’s important that you have a really clear idea of what you’re looking for before you go and view a property. With the amount of property information available in online listings, it should be possible to be fairly certain about whether a property is right for you before you see it in person. Floorplans will tell you whether there’s enough space, street view/view on map functions will tell you about the location, and the photos/video tours will show you the condition of the property. In a more subdued property market, it is common to have a second viewing before making an offer on a property. In a fast market, this is rarely an option as there are often other buyers who are willing to make an offer before you get the chance. If you’re serious about a property, it’s important that you are clear about how much you would be happy to pay for it before you view the property, so that you can make a quick and decisive offer if you decide it’s ‘the one’.
- Make yourself a great prospect if you want to beat the competition
In a market where there are more buyers than there are properties, it is important that you make yourself an attractive prospect. Getting into a bidding war is never a good idea as it often leads to paying more than you’re happy with, and sometimes more than the property is objectively worth.
When competing against other buyers, the easiest way to secure the property is to make yourself a chain-free buyer. Around one in three property sales will fall through before completion, many of them due to chain collapse, so a chain-free buyer is a very attractive prospect for any seller.
There are several ways you can make yourself a chain-free buyer. If you’ve not yet found your next property, you might consider selling your current home and moving into a rental property or with family whilst you secure your next home. If, however, you’ve already found your new home and are competing against other buyers who are chain-free, or in a more proceedable position than you, you could consider selling your existing home to a home buying company. A genuine cash home buying company will buy your property with their own cash funds on a date of your choice. Because they’re buying with their own cash, and not relying on mortgages or investors, they can buy your property in as little as a week. The sale is also guaranteed, so it will effectively make you a chain-free buyer, but with out the hassle of having to move out of your current home before the purchase of your next home completes.
- Get the right team behind you
Choosing the right conveyancing solicitor can make a big difference to the success of your move. Slow sale progression is a major bugbear for anyone trying to move house. Ensure you select a solicitor who is responsive and motivated. Remember, if they’re not great at getting back to you, it’s unlikely they’ll be great at getting back to your seller’s solicitor.
- Keep talking
Communication is key when buying or selling a property. Little misunderstandings or a lack of contact can lead to tension that can jeopardise a sale, so it’s important to keep talking at every step. Make sure you keep the estate agent updated on how any mortgage application is progressing and any other updates from your solicitor, so they can update the seller. In a competitive market it is especially important that your seller knows you are motivated and doing your best to complete at their earliest convenience.
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