People wanting to move home in the current economic climate need to change tactics in order to stimulate the flagging property market.
That’s the view of the Withy King partner Rob Collins, who believes a complete change is needed in the way buyers, sellers and those involved in the moving process promote and sell properties for sale.
Although Rob welcomed the announcement made by the Chancellor to abolish stamp duty for properties under £175,001, he believes that sellers should be prepared to find somewhere to buy whilst awaiting offers on their own property.
Rob said: “There is a perception that there are lots of willing sellers but too few buyers. In fact most sellers also want to buy a property but are reluctant to begin searching until they have secured their sale.
“This is certainly a difficult economic climate with considerable uncertainty. However, once a decision has been made to move then provided the deal is affordable and the property is right lives should not be put on hold whilst we wait until the TV and the tabloids tell us it is safe to buy again.”
Rob suggests the following approach should be encouraged:
- Buyers should make an offer on a property even though they are still waiting to sell. They do not need to begin incurring legal or others expenses until they have secured their own sale and the chain is ready.
- Sellers should be encouraged to accept in principle a suitable offer even if that buyer has yet to sell their own property.
- Both parties should appreciate that until they have each secured their own sale and purchase it may be necessary to re-negotiate the price.
Rob, a former President of the Marlborough Chamber of Commerce, has discussed the situation with local Estate Agents who share this view. Jonathan Conning of Henry George agrees that more needs to be done to encourage people to look.
Jonathan said: “If more sellers co-operate with this approach then it will help kick-start the local property market. If someone likes a property and puts in a realistic offer it will encourage the seller to do the same. The conveyancing process doesn’t have to start until both sides are in a position to proceed. Realism and an open mind are the keys, keeping figures fluid will ensure that deals can be done.
At Hamptons International Andrew Marshall said: “Those looking to move need to ask themselves what are they trying to achieve and detach themselves from yesterday’s prices. Moving house is not just about price and there needs to be more realism in people’s expectations.
“If you’re looking to move there’s no point putting your life on hold and waiting for your property to reach the levels of six months ago. It’s all about being pro-active and thinking creatively. If a property is correctly priced, it will sell in a month.”
Rob observed that the media reporting continues to sensationalise and seemingly encourage a negative property market. He said, “We are continually told about the Housing Market. In fact there are numerous regional variations in the housing market so what might be reported in the national media doesn’t necessarily apply to the house you want to sell or buy.
“There is continual comparison with the early 1990’s (the last time that there were so few sales agreed), but little mention that mortgage rates are approximately half now what they were then.”
Nationwide recently reported there to be a 10% House price reduction this year and the media are reporting this as a bad thing, but Rob commented that since most people will buy a more expensive property this actually puts them in a better position than before prices fell.
Before the 10% price reduction a couple selling for £280,000 with a £150,000 mortgage loan to repay would need to borrow £210,000 to buy a £340,000 new home. If both houses have fallen by 10% then that couple would need to borrow £6,000 less for the same house move! Although the amount will differ, a 10% reduction in values will produce a saving throughout the price range.
“I hear constant reports regarding the mortgage market and certainly high loans to value of property are not easily available but I have not yet had any client refused a loan.”
Matthew Carter, director of mortgages at Nationwide, said: "There is plenty of opportunity for borrowers to find themselves a good mortgage deal right now. Many lenders have been cutting the price of their mortgages following further reductions in swap rates. We recently reduced our rates for the third time in six weeks and we will continue to look for opportunities to make further reductions, where possible.
Rob added: “People need to remember that for many a house move is a long-term commitment. Whilst no one wants to make a bad deal it is important that people remember why they decided to move. This will rarely be for financial reasons but for things such as needing more space, wanting a change or wishing to be closer to a particular school.”
Matthew Harvey from Humberts agreed that one of the main barriers to moving relates to confidence. He said: “People definitely want to move and we’re receiving new instructions to sell and new applicants registering to purchase on a regular basis. If buyers and sellers commit to a purchase in principle, this will provide greater confidence in the marketplace and help to get the cycle well and truly under way.”
Rob concluded: “When moving there has always been certain criteria that need to be met. Those criteria are the same now as they were 12 months ago. So clean the windows, mown the law and happy hunting.”
For advice on this or any property or construction issue please call Rob Collins on T: 01672 518820 or e-mail Rob on robert.collins@withyking.co.uk.
