TIME FOR CAUTIOUS SELLERS TO BITE THE BULLET
By Philip Macdonald of Abbotts
In its latest report the Royal Institution of Chartered Surveyors (RICS) reported significant improvements in demand for property, with the eighth successive monthly increase in new buyer enquiries. This has fed through into increased transactions leading to a sharp rise in sales.
As existing stock is now reducing at the fastest rate for a couple of years, the focus is on new instructions. Sellers with time on their hands, no pressure to move and concerns about pricing have been cautious.
RICS gives some assurance that prices are stabilising, nevertheless new rules on Home Information Packs (HIPs) may continue to hold people back. These are an unnecessary extra expense and have certainly contributed to slowing the housing market. The government should suspend them until we see a full recovery.
It is worth remembering that the moratorium on stamp duty up to £175,000 only lasts for a few more months, so properties in this price range are especially sought after by first time buyers. Sellers are in a good position to secure a sale, enabling them to move up the scale.
Hopefully, the government will extend the moratorium for another year in order to sustain first time buyer demand, which has helped to boost activity. Mortgage lending remains an issue for some people, but it has certainly improved. With interest rates likely to remain low for the foreseeable future, there are some good products available.
So, is it the right time for those cautious sellers to bite the bullet and enter the market?
Given the promising RICS commentary, and our own experience on the ground, the answer must be yes. Although some sellers are finding it difficult to come to terms with lower asking prices for their own properties, they can certainly benefit from similar reductions when they buy.
We are seeing people able to ‘leapfrog’ to their ideal home, buying something larger than they could have ever have anticipated at this stage in their lives. Because prices are affordable, their mortgage is affordable. The secret to success is the choice of agent. Pick one with experience, and a track record of sales in the bad times, as well as the good.
They should know how to present a property in the best way and how to achieve the best possible price, based on recent sales of comparable properties. They should also be able to advise on the next purchase and actively seek out the ideal property, co-operating with other agents when required to identify exactly what a seller wants.
They should also be able to keep control of the whole transaction, both sale and purchase, through to exchange of contracts, and the day you move in, smoothing the process and keeping all parties regularly in touch with progress.