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 been quite turbulent for the UK property market. House prices initially rose by more than 10 percent – the quickest they’ve grown in 15 years – before political uncertainty and economic woes in the latter half of last year derailed the market somewhat. Property prices have fallen for several consecutive months. So, is now a good time to sell?
In this guide
The UK property market 2022
2022 was a year of two halves for the UK property market. The first half of the year saw continued exponential growth, thanks to cheap borrowing, strong demand and a shortage of available properties.
During the second half of the year, things began to change. Steeply rising inflation and an energy crisis were already beginning to impact household spending and affordability when the Truss/Kwarteng mini budget threw the financial markets into turmoil. Overnight, hundreds of mortgage products were withdrawn and eventually replaced by much more expensive alternatives. Would-be buyers suddenly had their mortgage lending affordability slashed, resulting in a fall in both property prices and volume of sales.
What will happen with house prices over the next year?
UK property prices have now fallen for several consecutive months. Will they continue to fall over the next year?
There are several factors that are putting a downward pressure on property prices:
- Rising inflation
The cost of living has risen sharply over the last year, thanks high fuel, clothing, food and utility costs. This has 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. Mortgages are more expensive than they have been over the last few years, which means buyers are likely to have to reduce their property budget.
- Salary stagnation
With both the cost of living and interest rates rising, most households are feeling the pinch. Salaries are not rising to keep up with inflation, so every household is likely to be significantly worse off.
The one big factor that may lead to some property price resilience is the continued shortage of homes for sale. There is still an imbalance between the number of homes available and the number of people that want to buy a property. Without this imbalance, we would likely have seen a much more dramatic price crash at the end of 2022.
Should you sell your house when property prices are falling?
There are pros and cons to selling a house during a period of price correction.
It’s difficult to predict whether property prices will continue to fall, stabilise or even begin to recover over the next year, due to the number of external factors at play. Without a crystal ball, whether or not you should sell will depend on your individual circumstances.
If you have a strong need to move, eg. you need more space to fit a growing family, you’re relocating, or you’re struggling with the cost of living and want to move to a more affordable property, I don’t think there’s a strong reason not to move. You’re likely to sell at a lower price than you would have done last year, but you’ll also be able to buy at a lower price.
If you’re selling an inherited property or former buy-to-let, there are arguments both ways. Some will suggest you should sell before prices drop further, whilst others could argue that you should try to hold on to the property until prices start to rise again. The problem with that advice is that it will very much depend on how long you can afford to hold on to the property for. It could be some time before we see any meaningful rise in property prices.
If you are selling a property because you have a strong need to do so, this isn’t a disastrous time to sell a property, it’s just not as buoyant a market as it has been. Property prices rose very quickly between 2020 and 2022, so although prices are now beginning to fall, they are largely still at above 2020 levels.
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.
- Although the market is slower, there are still buyers out there for desirable properties. If interest rates continue to rise, that demand may drop.
- The current market is a cautious one. That means there is less competition for properties than there was last year, and therefore you’re more likely to get a bargain.
- Although interest rates are due to continue rising, most mortgage products have now factored in future increases and are unlikely to go much higher.
- Mortgage rates have risen steeply since September 2022, impacting buyer affordability. You may be wary of committing to a new mortgage when it’s difficult to predict what will happen to interest rates over the next year.
- With the cost of living so high, moving house is an expense that many people are currently choosing to avoid if they can.
- The current shortage of properties means your choices may be limited. Is it worth hanging on for a more buoyant market where you’ll have more options to choose from?
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
Your approach to buying a new property will need to be a little different in a turbulent 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.
- Know what you’re looking for and do your homework
In a changeable market, you want to make sure that any property purchase is a wise investment at a good price. Do your homework so you have an idea of how much you should be paying for a property of that kind, in that area. Looking at sold property price information can be a great help with this. Don’t be afraid to take your time and go back for a second viewing if there’s anything you’re unsure of.
- Shop around for the best mortgage deal
Mortgage rates are considerably higher than they were, but do still vary, so it’s important to shop around to get the best rate you can.
- Know who else is in your property chain
Unfortunately, around one in three property sales will fall through before completion, many of them due to chain collapse. To help maximise your chances of a successful move, it’s important to know how many people are in your property chain and how far along each transaction is.
Struggling to sell your property and worried about holding up the chain? 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 and help to speed up your move.
- 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.
Find out more about:
- When’s the best time to sell a house?
- What is a down valuation?
- How to sell a house without an estate agent
- What to do if your house sale falls through
- How to avoid selling your house to pay for care
- How to sell my property portfolio
- The return of negative equity
- How much is my house worth?
- How long does a mortgage offer last when buying a new home?
- What is a mortgage prisoner and how do you become free?