Is Now the Best Time to Sell Your House?

Is Now the Best Time to Sell Your House?

February 13, 2017

Is Now the Best Time to Sell Your House?

Timing is everything, and picking the right opportunity to sell your home is crucial to make sure you get the top value from it. This takes a keen eye, since gauging the condition of the real estate market is a difficult task, and requires a good deal of research and experience. As an expert in the local real estate market, we’ve seen the effect that national trends can have at a local level, and we know that picking the right time to sell is one of the most important parts of the sales process.

When to Sell

So when is a good time to sell?  In order to maximise the sale price of your home, you’ll want to hold on to it until house prices reach their absolute maximum. However, if you hold on too long you’ll find that the market deflates and becomes less competitive; there are fewer buyers, and consequently sellers are forced to lower their asking prices. You therefore want to sell as the property “wave” crests, making the most of your property’s value just before it starts to drop. With any luck, you’ll also time it so that you’re looking to buy a property just as prices begin to fall, and might be able to pick up a bargain.

Why Sell Now?

Choosing when to sell is all about predicting what the market will do next. Identifying the signs of a potential decline in house prices before it happens lets you time your sale – so are there any upcoming factors which could indicate falling house prices in the future?

Government Home Building Initiative:

Recently, the UK Government released a whitepaper laying out its plans to re-invigorate UK house building projects. Pledging to construct a million new homes by 2020, this paper will make several key changes to the ways in which new homes are built:

Freeing up £3bn of funding for smaller construction firms to drive competition

Requiring local councils to be more pro-active when creating housing plans

Encouraging developers to avoid “low-density” housing where alternatives are available

Requiring construction to begin within 2 years of planning permission, rather than 3

Introducing the “Lifetime ISA” to help first-time buyers.

These initiatives are designed to energise developers of low-cost housing in the UK, and drive a mass project of home building in the next few years. The idea is to reduce competition for housing stock by increasing the supply; this will then reduce demand for property, and prices will cease increasing.

End of Help to Buy Schemes:

The UK Government’s set of Help to Buy schemes, designed to aid first time buyers in purchasing their first home, will mostly come to a halt during 2017. Though the Chancellor of the Exchequer has implied that these will be replaced with new Help to Buy initiatives, these are yet to materialise. But how will this affect house prices?

Most Help to Buy schemes focussed on making it easier for buyers to afford a deposit on their property, either by backing high LTV mortgages or by providing equity loans. The intention was to alleviate the pressure on first-time buyers to save, and help them to compete in the housing market. Unfortunately, a side effect of this was to drive increased competition; because first-time buyers could now afford to pay more, house prices simply rose again – there was no less demand and no more supply, so allowing buyers to borrow more simply meant that house prices continued to increase.

Now, with the end of Help to Buy schemes, first-time buyers are finding it hard to save up for deposits again, and aren’t able to meet the asking prices created in the past few years. A likely result of this will be a general deflation of house prices, as competition for higher-priced homes drops off.

Rising Inflation:

Currently, interest rates are at an all-time low, with the Bank of England base rate at just 0.25%. However, current predictions for the year indicate that inflation is likely to increase beyond the 2% target of the Bank of England, and it’s probable that the Bank will respond by raising its base rate. This will have the effect of making mortgages more expensive, thus making it more difficult for buyers to finance their purchase of a new property.

Should You Sell Now?

The UK housing market is currently in a fairly competitive position, but there are some signs of change on the horizon. Although it’s too early to say, there are some factors which could potentially slow the growth of the real estate sector in years to come, but not enough to make selling a necessity. If you’re intending to move anyway it might be best to take steps sooner rather than later, but if not then it’s unlikely you stand to lose much by staying put.