By Tim Keneally
It’s fair to say the housing market has been frantic since the country was released from a series of national lockdowns following the Covid pandemic in 2020. Aided by a Stamp Duty Holiday on properties up to a value of £500,000 and coupled with pent-up demand, the numbers of buyers increased dramatically and supply remained low, resulting in house prices soaring.
Those of us that have been in the industry for some time recognised the market to be totally artificial and understood that at some point, the bubble would burst. However, at the time, it was case of adapting to the ‘new’ market conditions and making the best of it.
Fast forward to today (November 2022) and it’s fair to say the bubble has burst. Mortgage interest rates have risen following the Bank of England increasing the base rate to 3%, partially because of the disastrous mini-budget announced by the Truss/Kwarteng Government and partially in response to rising inflation. Add into the mix a cost-of-living crisis and an energy crisis, you would be forgiven for wanting to hibernate over winter whilst feeling anxious about the forthcoming 12-18 months.
As things stand, our stock levels are higher than they have been since pre-covid times and the number of buyers in the market have significantly reduced. Consequently, buyers now have more choice and the market is shifting in favour of the buyer (it’s becoming a buyer’s market). In transitional periods such as this, it is vital that your estate agent has experience working in different market conditions to provide you with the best advice and prepare you for what may be to come.
As an example, one of the most challenging tasks in a transitional market such as this, is bringing your property to market at the correct price. Resist the temptation to ‘test’ the market at a higher value, as in many cases this will result in a price reduction to generate more interest further down the line.
An incorrect marketing price/strategy could raise unwanted questions from purchasers and can contribute towards eventually selling for a lower price. I would advise anyone looking to sell, to be cautious of the agent providing you with the highest valuation (especially without current comparable evidence) and beware of the agent that is offering you the cheapest fee. This is a common tactic as certain agents attempt to win business by flattering the client with a high valuation and quoting the cheapest fee. There is usually a catch which often is that you are tied to that agent by way of a long-term contract, meaning you have no control of your sale.
We have recently come across agents quoting initial tie in periods of 8–16 weeks, plus an additional months’ notice. Many of these agents will not openly discuss their terms of business which is another sign that something may be amiss. Please remember, when choosing who to sell with, transparency is key.
I’m proud to say, at Arden Estates, we offer no minimum tie in period putting our clients in control of their sale. If the client wishes to move away from us, we simply ask for 28 days’ notice, at the end of this period the client is free to move on with no charge.
With the above in mind and the prospect of tougher times to come as the country officially falls in to recession, I can’t stress enough the importance of selecting an estate agent that has a solid, well established team, a strong local presence, provides transparency from the start and has experience working in different market conditions. We believe our teams at Arden Estates have all of these qualities whilst providing a personal and professional service – so, if you or anyone you know would like to discuss selling your property, we would be very happy to help.