Hello everyone! Today we’re very pleased to feature a guest post from Rosie at GetAgent who has provided us with some thoughts on what factors to be looking at when considering (amongst the madness) if 2020 is a good time to sell a house or not…..
(Sponsored: Please note this is a sponsored post where GetAgent has provided us with a consideration to be featured on the Wilderness – but rest assured per our editorial policy we only provide you with third party content where we think it’s got something useful to say, we know you’re not here for advertising copy!)
Over to Rosie!
House Prices
When considering whether it’s a good time to sell a property, the first thing many people look at is house prices. What are the headlines saying? Does this match the picture in your local area, or are prices pretty static?
Perhaps surprisingly, house prices in the UK have not only weathered the impact of coronavirus, they have done remarkably well. There’s been unprecedented growth in house prices in many parts of the country. Rightmove even suggested that the property market witnessed an ‘unexpected mini-boom’ this summer.
This means that in terms of getting the best price for your home, now is a pretty good time to come onto the market. It’s likely your property has increased substantially in value – particularly if you’ve been living there for a few years. And, if you wait much longer there is a risk that growth will slow, or even that house prices might drop.
Demand for Properties
One of the main reasons for the levels of house price growth is increased activity in the property market. Currently there are a large number of people actively looking to buy property all over the UK.
There are a lot of reasons for this. In part it’s because people have spent a lot of time at home this year. As a result of the period of lockdown, and the increase in the number of people working remotely, many are reconsidering what they need from their homes.
On top of this, many of those who wanted to move house in March and April were unable to, because the lockdown restrictions meant estate agents, solicitors, and removals companies were not able to operate as they would normally. This has led to what many in the industry are calling ‘pent up’ demand, which is being released now the market is active again.
The other reason is stimulation initiatives from the UK government. As part of their protective economic measures the UK Government introduced a temporary holiday on Stamp Duty Land Tax in England. This meant that anyone purchasing a property under the value of £500,000 no longer had to pay the tax, which is usually due on any property over £125,000 (unless you’re a first time buyer). Similar tax relief measures with different thresholds have also been brought in in Scotland and Wales. As a result buyers could qualify for savings of up to £15,000. Given the costs that go into buying a property, any saving this large is a pretty appealing reason to try and buy before the holiday ends.
Lack of properties on the market
A large number of buyers on the market is a particular positive when they outnumber those looking to sell. When there are more buyers than sellers, the competition to secure the best properties drives up prices, and encourages people to place offers more quickly than they would normally.
Current estimates suggest that there are about 13% more people looking to buy than there are properties on the market. This means that for every 100 homes for sale, there are around 113 buyers. This means that sellers are currently in a really strong position to negotiate the best price and sell quickly.
Will it last?
On the whole, things have looked pretty good for the property market this year. But, perhaps the most important question to anyone looking to sell in the next few months is, will it last?
Opinion is divided.
Some point to the fact that the Stamp Duty holiday – a key driver in encouraging more buyers to the market – will come to an end in March. Given the time it takes to complete a transaction, many buyers will have to put in offers on properties very soon if they want to take advantage of the saving. It’s likely that many people have brought forward their plans to move in because of the tax relief. As a consequence, many property pundits predict that fewer buyers will come to the market next year.
The other thing to bear in mind is that a number of the government financial support schemes are scaling back towards the end of this year. As a result, more people will find themselves less financially secure, and less able to move house.
On the other hand, some commentators point to the fact that there is a large group of people are working from home, spending less on commuting, and going out. This group have been able to use this period to bolster their savings. They’ll be in a better position to buy next year – having saved a larger deposit.
From a house price and demand perspective, 2020 remains a relatively good time to sell your home. It could be risky waiting for ‘better’ market conditions, given the level of uncertainty that remains in the UK.
Personal Circumstances
However, if you’re considering selling your property this year, it’s just as – if not more – important to consider your personal financial situation.
Does selling your home fit in with your financial and personal goals? Are you desperate for space, or need to release equity? Questions like these should be considered with as much importance as the general conditions of the housing market.
Sometimes moving house is a necessity, and you shouldn’t ever feel pressured to make such a large financial decision just because of market conditions.
A little something extra
For the super-practical amongst you, GetAgent has recently put together a map showing the average difference in cost between buying and building a new “dream” 5-bed home in each area – I was shocked by how much it is in parts of the south!
And that’s it!
Thank you Rosie! We know that for many readers buying a house or saving up to buy a house is a big part of your financial planning – if there’s any aspect that you’d like to see covered or have a question, please do leave us a comment below or contact us.
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