“Slow Growth with Strong Demand”
Everyone knows that the balance of supply versus demand exerts the greatest influence over property values. Yet, as we approach the spring market we find ourselves in a situation where the annual rate of house price growth is at its lowest for four years. at 2.3% (HMLR), but demand remains strong. Could this be the tipping point where buyers are voting with their pockets in respect of overpriced properties?
Certainly pricing appears to be more sensitive than it has for some time. Indeed, properties coming to market are experiencing their smallest February price rise since 2009. According to Rightmove, you are 40% are more likely to sell your property for the best price if is priced correctly at the outset, so it’s important to avoid it going stale on the market. This is supported by data from the Home Owners Alliance, which reveals that just 12 days is the optimal length of time a property should be listed on the market until a buyer is found. Agents who price right and sell within this time also achieve an average 100.89% of their asking price!
It is therefore far better to prompt interest and multiple offers by attracting buyers with a reasonable price than to scare them off with an inflated one. Today’s buyers are too savvy to pay over the odds. So our advice is to be careful when interviewing estate agents who habitually “overvalue” to try to impress you!
Inflation has already started its predicted rise and is expected to hit 2% in the coming months when interest rates could possibly rise as well. Lending criteria remain tight and the uncertainties prompted by a very different political landscape to this time last year, both nationally (Brexit) and internationally (Trump) are not an ideal background for strong house price growth.
However, whilst anybody selling will of course want to secure the highest price the market will pay (and we’re quite good at that bit), for most people, the ability to actually move is even more important. It would be a shame if high house prices prevented people from moving due to a new job, a growing family, downsizing, etc – the stuff of life!
One thing is sure – at this time of year, if you are thinking about a move, it might be worth getting your property on the market now as there could well be a flood of competing homes entering the market this spring. Why not take advantage of this and get ready buy one of these from a position of strength yourself, having sold your own first? Please feel free to call us for an informal chat about the value and saleability of your property – you might be pleasantly surprised!
Neil Newstead, FARLA MNAEA
CEO – Oakfield Estate Agents