Act Now to Move Home Before Christmas!
Santa may be enjoying some well deserved rest and relaxation on a lovely Welsh beach, but now is the time for homeowners wanting to move in time for his next visit to be taking decisive action! With the average time to sell a home in the UK being 62 days you may feel you have plenty of time but unfortunately the average time for conveyancers to complete a transaction from the point of sale agreed is now 154 days! Meaning for those just coming to market now it might mean a move in the New Year and of course for those already on the market but struggling to sell then a change of strategy now is essential. Record High Asking Prices Average asking prices in the upper quartile have risen by 1.3% compared to last year, while the ONS has reported that average house price across the UK is up 1.8% against last year. Pent up demand from home movers who put plans on hold last year has helped with the number of sales agreed in the first four months of the year 17pc higher than the same period in 2023. Inflation Falls to Lowest Since 2021 CPI inflation fell in April 2024 to 2.4%, this was largely driven by a fall in household energy bills. This positive news has led to a rise of 0.3% in the Pound against the Dollar and has had many MP’s calling for cuts in interest rates. All of this against a backdrop of wages holding up at around 6% helping to turn the tables on household sentiment and positivity like this is always great news for the housing market. Although we know many MPs would really like to see cuts to interest rates we are confident that other economic pressures will mean that the MPC will resist and we think rates will remain at the current 5.25% until the end of the year, perhaps with a 0.25% cut in November at the earliest. Although a cut would be further good news for the housing market we feel there is enough positive sentiment around for us to see a continued resilient market throughout 2024. So Why Isn’t My Home Selling? We are aware that despite this optimism and positivity there are lots of homeowners who have been trying to sell their home now for far more than the average 62 days and if you are one of these unlucky home movers then you are probably wondering why? There are a whole host of reasons why your home may not be selling and we would encourage anyone in this position to review these factors before deciding to adjust their marketing price. Here are just four of the factors you should consider before changing your price; Quality of photography. In this digital age home searching is not immune to our decreasing attention spans, with the swipe right culture applying to home searches too. You only get a few seconds to make a good impression on apps like Rightmove and OnTheMarket. It is therefore really important that your photos are the best quality and eye catching. Although the tried and tested front of house photo is a great option it is also a good idea to mix it up a little and if you have a feature that is sure to be a real crowd pleaser then you should consider using this as your lead image. We like to review the performance of our adverts weekly and if needed rotate around the images we are using. We typically have around 60-80 images on file although we don’t use them all at once this means we have a stock library we can use to keep our adverts fresh. Floor plans and land plans. Sounds basic but believe it or not some agents still do not include these as standard. If you don’t have one, speak to your agent ASAP and get one added to your adverts. Social media exposure. These days most agents will have a Facebook page, but many of them do not leverage them properly to get the best reach and exposure for their clients. Using a multi-platform strategy that includes, Facebook, Instagram, TikTok, LinkedIn and Youtube agents can reach tens of thousands of potential buyers. We consider this a great way to reach a more ‘passive buyer’, someone who is interested in moving but is not quite at the stage where they are checking the property portals twice daily for new listings. It is also a great way to show potential buyers properties that are outside their current search criteria. When I started in agency there was no computer searches and as an agent we would always tell buyers about properties in the next village over or one just outside their budget, the likes of Rightmove cannot do this, but we have found by using our tried and tested techniques we can replicate this through our social media campaigns. Property Videos. Professionally produced video tours are a useful way to showcase a home and are loved by property buyers, who say they help them to get an honest feeling for how the property flows and for the ‘feel’ of the home. In addition to sharing videos on our website and on property portals we have found they are a great tool to use in combination with our social media strategies, with increased reach and engagement from video on many platforms. By reviewing your current marketing position and implementing a detailed plan it is possible to revitalise a floundering campaign. How will the General Election affect things? Traditionally a General Election causes uncertainty in the market, with some buyers putting their plans on hold until the results of the election are known. However, historically the Election has had very little impact on average house price growth, with the rate of growth preceding an election being almost identical to the growth rate after the election. With the recently lower rates of inflation and widely predicted
What will Wednesdays Budget Mean for the Welsh Property Market
It is widely anticipated that the Rishi Sunak and Jeremy Hunt will want to stimulate a positive feeling to the economy and with reports that the Chancellor will have a smaller pot to play with than had previously been expected it is very likely that cuts and changes will be targeted towards home owners and the housing market as this is an easy way to create a sense of a buoyant economy. UK economic growth has been stagnant since the beginning of 2022, with high inflation and rising interest rates slowing economic activity. GDP declined over the last two quarters of 2023, meeting the definition of a “technical recession”. Modest GDP growth is expected to return in 2024 as inflation is forecast to fall and the Bank of England is expected to start reducing interest rates. The consensus forecast among economists is for GDP growth of 0.3% in 2024. All of this means the Chancellor needs to be cautious with changes as over ambitious and changes that had not been properly costed were to blame for the problems we faced in September 2022 when the value of the Pound plummeted. Novembers Autumn Statement has already set the course for some changes. We already know that there will be cuts to National Insurance, and an increase in the minimum wage. The Spring budget is only a few days away now and we would not be surprised to see reports of some significant changes after the 6th March, including: Cuts to income tax (and/or National Insurance) Cutting Stamp Duty Increased income tax thresholds Reforms to inheritance tax Help for home buyers, longer terms mortgages and the resurrection of the Help to Buy scheme Changes to the Lifetime ISA threshold All of which is likely to stimulate more activity in the housing market and a positive shift in buyer demand will almost certainly fuel increases in average house prices again in 2024. Tax on holiday lets It is also rumoured that Mr Hunt is considering scrapping tax perks for holiday let owners. Of course a move like this could be hugely beneficial in helping local communities our popular tourist locations, like Pembrokeshire, where a high proportion of properties have been converted to holiday lets. But of course this could also mean an influx of these properties being sold this year, which could have a negative impact locally on prices. Cutting Stamp Duty There is a large amount of pressure on the Chancellor from certain elements of the Conservative party to make cuts to Stamp Duty. However, as decisions over Land Transaction Tax (the Welsh equivalent of Stamp Duty) are devolved there is no guarantee any changes to Stamp Duty rates made in Westminster this week will be applied here in Wales. One suggestion has been to scrap Stamp Duty entirely for those looking to down size. There are reports that a lot of home owners are put off down sizing due to the cost of stamp duty and by removing it for down-sizers this end of the market will be stimulated, freeing up housing stock for families wanting to move up the ladder
Are we on the verge of another house price boom?
With all the conflicting news reports you might think it crazy to even ask if another house price boom might be on the cards, but it is a question asked by one mainstream journalist recently and when you start to dig a little deeper it is perhaps not as crazy as it first sounds. However, before we get too excited we have to realise that previosu predictions of cuts to the base rate have not prevailed and in fact in its last meeting the MPC were split, with two members even voting for an increase to 5.5% so there is obviously still reason to believe 2024 may not be the year for a boom but there are lots of factors that will be contributing to pressuring the market that way, not least it is widely expected that the Government will look to gain some favour prior to the upcoming election. Low Transaction Levels In the ten years to 2007 the average number of household transactions in the UK was around 1.3m a year, falling as a consequence of the financial crisis to an average of just under a million a year for the next twelve years until we saw numbers peak at around 1.2m in 2021 and 2022 and then dropping back to just 900,000 in 2023. Could this be a sign that there is huge pent up demand in the market? It could be reasonable to suggest that perhaps 300,000 to 400,000 people sat on their hands last year and pushed back their move waiting for inflation and interest rates to stabilise. A theory that would be backed up by an uplift in buyer activity this year, which is exactly what has happened. In their latest report Zoopla have indicated that there has been an 11% increase in demand for homes, Richard Donnell, Executive Director – Research at Zoopla says ‘The fact we have almost a fifth more homes for sale than a year ago is helping, providing buyers with more choice and boosting the chances of sales being agreed.’ I would go a step further and say the increase in available properties is giving more people confidence they will not have to compromise on their next move, something many home owners were nervous about during the really buoyant markets in 2021 and 2022, when many people considering a move put things on hold because they were afraid they’d be pushed into moving without being able to find the right place for them. But now in a steadier market that has more choice many of these potential sellers are now being tempted back into the market. Are prices going to fall in 2024? If only I had that crystal ball I could tell you the answer to this question. Lets look at the facts around house prices, in the last five years average house prices have soared by around 20% or £60,000, while 2023 saw the average price of a house in the UK drop by just 4% This drop appears to have plateaued toward the end of the summer and has remained relatively steady since. Interestingly tracking GDP, something house prices has done since the 1980’s (maybe longer but I don’t have the data to support any further back). So with GDP predicted to grow throughout 2024 and beyond it is understandable that many experts are suggesting house price growth is very likely this year and beyond, with many reports I have read suggesting we can expect 20% growth over the next five years. It is harder to know what will happen in the short term, as I mentioned above there is still a looming possibility interest rates will be increased, however most still believe we will end the year with a base rate closer to 4.5%. It is also likely that many potential home movers who postponed their move last year will take advantage of the slightly improved 2024 market and we expect overall transaction levels to be up this year. Government Intervention As I mentioned at the start of this report, it is widely anticipated that the Government will want to stimulate a positive feel to the economy and this is very likely to be targeted towards home owners and the housing market. The Spring budget is only around the corner and we would not be surprised to see reports of some significant changes after the 6th March, including: Cuts to income tax (and/or National Insurance) Increased income tax thresholds Reforms to inheritance tax Help for home buyers, longer terms mortgages and the resurrection of the Help to Buy scheme Changes to the Lifetime ISA threshold All of which is likely to stimulate more activity in the housing market and a positive shift in buyer demand will almost certainly fuel increases in average house prices again in 2024. So if you have been thinking about selling, what does all this mean for you? Act now! The market has shown signs of resilience and there is an increase in buyer activity that is likely to continue throughout Q1 and Q2, but with a general election looming we expect the usual softening of the market in Summer will continue throughout Autumn right up until after the election. Therefore in a year where we expect an increase in transaction levels this is likely to mean a very busy first half of the year and if you want to get the best price for you home, now is the time to act! If you are already trying to sell and have not had a positive start to 2024 then maybe it is time to consider a change of approach. I would always recommend reviewing your marketing and the service you are receiving from your agents. Are your photos reflecting the improving weather and showing some of the Spring flowers or are they still looking wintery? Has your agent discussed strategies to make sure you make the most of the improving market and have they
Returning Buyer Confidence
With a general election looming and a decidedly disappointing 2023 many experts predicted that 2024 would simply be ‘more of the same’ and as a consequence many of the National news outlets reported forecasts of house prices falling in 2024. However, with inflation lower than expected, it is now widely predicted that, although at the time of writing the base rate remains unchanged since August 2023, there will be a drop in the Bank of England base rate and in fact many experts are now expecting that there will be multiple reductions in the base rate this year. This in turn has lead to competition intensifying among mortgage lenders, with many dropping the rates being offered to attract new business. At the time of writing, according to Moneyfacts, the average 5 year fixed rate mortgage is now only 5.37% and this is expected to continue on a downward trajectory. But there is more to the housing market than just slightly lower interest rates! In a career of over two decades I have seen falling and booming markets and there’s always a cocktail of events that cause the biggest swings one way or another. The boom of the early 20’s (2020’s that is) was caused by artificially low interest rates and a pent up demand from years of Brexit uncertainty followed by the Covid-19 pandemic and of course the impact that had on buyers priorities. So what other aspects are in play at the moment? It could be argued that the market was curtailed in the final quarter of 2022 and throughout 2023 due to the mini-budget of September 2022 that caused so much disruption and lead to multiple quick increases in interest rates, which caused buyers to be nervous. With Rightmove reporting a 5% increase in the volume of enquiries in the first weeks of 2024 compared to 2023, could it be that some of those who put things on hold are now returning to the market? It certainly seems like it, with Rightmove also reporting an increase in Sales agreed in the first week of 2024 of 20% compared to the first week of 2023. This increase in buyer activity and the widely predicted change to interest rates has seem some forecasters amend their predictions for 2024, most notably Knight Frank who have gone from predicting a drop in average house prices in 2024 to now reporting that they believe prices will go up by 3% Which in the space of three months is a pretty significant swing in their prediction of 7%. However, competition among sellers is currently higher that it has been for some time with a higher than typical number of properties already on the market, plus so far this year the number of new instructions is up 15% compared to 2023. So if you have been thinking about selling, what does all this mean for you? Well returning buyer confidence is always good news, combine this with falling mortgage rates and the predicted Bank of England base rate drops it is likely we are going to see a much more balanced market than that of 2023, potentially even, dare I say it a sellers market throughout Spring and Summer, after which I suspect things will slow again with the announcement of the general election. With the increasing number of properties likely to be available on the market as we approach Spring it will still be important for sellers to ensure their homes stand out as they compete for buyers attention. Obviously competitive marketing prices are one solution, but this alone can just lead to a lower sale price. For owners of premium properties (like yours) in particular it will be important to ensure they have the assistance of a specialist agent who has experience in dealing with homes in the upper quartile. This agent must be able to demonstrate that they are capable of negotiating with savvy experienced buyers and that they have the ability to curate a stunning portfolio of marketing assets and the strategies to ensure the property is then exposed to the widest possible audience. It is important that you are important to the agent and not just another poster in a window, by working with a smaller number of clients the individual agent responsible for your sale will get to know you and will have the time to communicate effectively and regularly with you, giving them the opportunity to offer genuine expert advice at every stage, sadly too many agents and agencies have a ratio of sellers to agents that prevents the necessary level of customer service, which can result in excess stress and a poor sale price.