Optimistic House Sellers are Waiting for a Higher Price
When you’re pricing a property that you own, there is always the emotional value and the actual value. While we all like to believe that our house is the best, worth the most and will be easy to sell at a higher price tag, the reality of the market might be a rude awakening for sellers wanting a quick sell at the highest price point.
Property prices in the UK have steadily increased for years, with the average price of a home rising more than 8% in the last year alone making the average price £200,000. This trend has seller’s eager to get an offer at the high-end of the market value.
However, with sellers getting greedy or maybe just optimistic, the average property takes 30 days longer to sell than it did just a few years ago, prompting more sellers to approach a company who can buy their house to achieve a quicker sale. UK homes are now on the market for more than 90 days on average, up from 58 days back in 2012 and even London homes are on the market for 89 days before selling.
Sellers aren’t as eager to sell as they are committed to getting a high financial reward. They are willing to let the property sit longer in hopes of getting that buyer willing to offer the asking price, but there is a disconnect. Although properties are being listed at the top-end of their values, sellers are often forced to lower their asking price by more than 10 per cent.
Sellers Might Be Waiting Too Long
Over recent years housing prices have been steadily increasing in the UK and from 2015 to 2016, there is expected to be an overall price growth of 1% due to the race to buy property before the new Stamp Duty Tax but the picture for the entire year and 2017 isn’t as optimistic as the seller’s who have high price tags.
While the first three quarters of 2016 saw a price growth of between 6% and 8%, it is expected to drop by more than 4% in the fourth quarter. The impact of Brexit has certainly had its effects on the property market, even if it’s not as troubling as previously predicted. However, the 2016 growth is expected to turn three-fold into a slump of almost 3% in 2017 and an even bigger slump will hit London with a more than 5.5% fall in prices.
Not all property experts are as confident as the home seller’s in the current market. The effects of Brexit, the stamp duty tax, and a potential for the UK government to curb immigration starting in 2019 could decrease housing demand in upcoming years. With lower demand and subsequently, lower prices, sellers should maybe start considering offers a little sooner.
Next Year May be a Flat Market
Whilst predications for the UK property market are subdue for 2017 with negative or flat price growth predictions, the upcoming years after that are predicted to make a strong comeback by 2020.
The demand in the next two years whilst article 50 is sorted out is expected to be weakened by uncertainty and a slower economy and supply will continue to increase, resulting in lower house prices. This will make properties more accessible for both domestic and international buyers who are eager to hop on the property ladder.
Predictions have been made for the next five years by real estate firm, JLL, who predicts that there will be a steady growth by 2% in 2019 and up to 5% in year 2021 – of course there are variations by region and Scotland and Wales are expected a slower but with strong growth rate in the same period. The London region is predicted to grow by 3% in 2019 and as much as 7% in 2021 but the central London property market will be slower to grow with only 5% growth in 2021.
The forthcoming years in the UK are hard to predict as so much of the future is uncertain until the details of the EU exit are truly understood and whether or not the UK will remain a single market with the EU, the UK and especially London are tied to not only domestic but also international demand and therefore buyer confidence and accessibility will determine the strength of the property market, particularly in London.
When you’re selling a property, the right price is everything. If you set your price too high, you might be forced to keep the property on the market as you wait for the right buyer, but if the right buyer doesn’t come, your value inherently decreases as buyers become more sceptical of the price or the property. Furthermore, sellers generally become more eager to sell as time goes on and buyers will take advantage of the vulnerable position.
The housing market is experiencing a down-swing post-Brexit and this might mean that you have to accept a slightly lower price than you may have originally anticipated for your property’s return on investment, but the uncertainty of the next two years could be a reason to sell to a house buyer rather than continue to wait.
Predictions suggest that the next 3-5 years will be positive and prices will continue to grow in the strong U.K. market and perhaps waiting even longer to sell might be the right choice for your property’s resale value, however, this could be a gamble as you can’t predict the future.