Should I sell my house now?
With average house prices dropping and with speculation they may fall further, you may be wondering “should I sell my house now?”. What impact will the cost of living crisis have on the housing market? And what about higher mortgage rates? We look at the why, despite all of this, now is as good a time as any to sell.
Should I sell my house now?
Yes. If you want to sell your house now, with house prices dropping recently after many years of house price increases, it might be a good time to capitalise on house price growth before it wanes, especially if you’re selling a second home or rental property.
It’s also worth noting that despite what commentators and the media are saying about house prices, people still need to move home for a myriad of personal reasons. These include:
· Death, debt and divorce which are perennial drivers of house sales and purchases
· Relocating for a job
· Being ready to downsize
· Your family expanding and a need for more space
· You’re selling a second or inherited home
Unlike investors driven by profits and house prices, a homeowners’ priority will be to act on what’s best for their personal circumstances. Having said that, our homes are often our biggest financial asset, so it’s worth understanding what’s happening in the market when deciding if now is a good time to sell now.
What’s happening with the property market right now?
The latest house price data reveals that while house prices fell again last month, they are still significantly higher than this time last year. And early signs are that the market is stabilising as people are looking ahead and putting their moving plans into action. As mortgage rates start to lower and inflation moves under control, Rightmove reported seeing an uptick in demand. From November 2022 onwards, rates available on fixed rate mortgages started falling, a trend that has continued despite Bank of England increases to the base rate of interest. Its tenth consecutive hike in the base rate, taking it from 3.5% to 4% on Thursday 2 February, is the highest level since Autumn 2008. But despite this, the best rates on fixed rate mortgages fell again this month as a mortgage price war takes hold. Good news for your prospective buyers.
Should I sell my house now: will house prices crash in 2023?
There has been a lot of talk about an impending house price crash, with some speculation prices could plummet. With the rise in borrowing costs over time, high inflation and the cost of living crisis, it seems likely that prices will drop further in 2023.
However, predictions of how far down prices will go range from around 5%-10%. Although any drop in house prices should be viewed in the context of how much prices have risen in recent years. According to Nationwide, the average UK house price in December 2022 was £262,068, while in December 2021 it was £254,822– an increase of £7,246.
As such, it seems more likely there will be a house price correction rather than a crash. That said, if you want to sell, you might want to get in as soon as possible before prices drop.
How to know if it’s the right time for you to sell
There is lots of research you can do to establish if now is the right time for you to sell.
· Check the competition: Look at Rightmove and Zoopla as though you’re a buyer – what competition would your home have? What prices are similar homes going for? How long are properties like yours being marketed for? Are prices being lowered?
· Speak to local estate agents: How strong is demand for a property like yours?
· You’ll also want to ask them about average sales time in your area too.
· Check local sold prices using the Land Registry sold prices checker
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But is winter a good time to sell my house?
It may still be winter but according to Rightmove, activity in the buyers’ market picks up in the New Year and grows into the peak of spring.
Should I sell my house now to avoid falling into negative equity?
Negative equity occurs when the market value of your house is below the outstanding mortgage secured on it. Negative equity is more common when house prices are falling and it is a major concern when you want to sell your home. Whether you are at risk of this depends on your circumstances. If you bought recently with a small deposit you will be at a higher risk. And you’ll also want to consider how likely it is that you’ll want to move house in the near future.
Should I sell my house now or rent it out?
It might make sense to rent your house out rather than selling it if for example, you’re moving temporarily, perhaps for work, and you want to keep the option of moving back to your old house. Or if it’s an attractive rental property likely to generate good rental income.
There’s a lot to think about; unless you’re planning to let it out for a short period and your mortgage lender gives you ‘consent to let’ so you can rent it out, you’ll need to switch to a buy to let mortgage. There are tax implications too.
When is the most popular time to sell a house?
The most popular times to sell a house traditionally is spring or early autumn. Spring is particularly popular time as we head into the warmer weather and Rightmove has reported March as the month it sees the highest number of enquiries per property on sale. It reports April as the next-strongest month to sell a property, followed by May. But don’t let this put you off if you want to sell now. You need to consider trends in your local market so choose a good estate agent and ask them to show you the figures tailored to your area and your property type.
