Recent news reports have suggested that UK house price growth has been slower than expected, so we asked our MD Tom Soane for his take.
“Property prices should start to come down a bit over the next couple of years because people can’t borrow as much, bad news for owners.
Generally speaking, normal property prices are dictated by first time buyers. If mortgage rates go up, first-time buyers can’t borrow as much. That means the second-time mover won’t get as much for their property and subsequently they can’t offer as much on their next property and so on and so on.
Don’t worry though, it’s all relative and we’re not talking massive differences around the Portsmouth area.
Add economic uncertainly into all this and you’ll start to see less buyers and more people trying to sell. If you follow the simple supply and demand rule, prices will come down.”
Recent news reports have highlighted that over 75% of Britain’s housing equity now belongs to the over 50s. With an ever-growing and aging population, are less people selling their properties and as a result reducing mobility in the market?
A study by Lloyds Bank, reported by Estate Agent Today, found that 63% of ‘Empty Nesters’ are enjoying their home now they aren’t sharing it with their children, however 14% felt their home is too empty.
At the other end of the spectrum, under 35s account for just 4% of the housing wealth in the UK, with the ‘Generation Rent’ is rising, as the average first time buyer is now 30 years old. Partially due to the increasing eligibility criteria first –time buyers are up against.
However, despite the many contributing factors that influence the housing market, I would still hesitate to call the market stagnant. Despite a slow start to the year, not helped by the severe weather, we are encouraged by the activity we have seen in the Portsmouth housing market.
A recent RICS study, reported that people are still on the move. And a moving market is the key to a healthy market! So is there reduced mobility in the market? I don’t think so, however this is more red tape to get first-time buyers in and more Empty Nesters enjoying their homes again.
Just remember, the market will always fluctuate and I truly believe that the right time to sell is unique to every vendor, and you should do so when it best suits you and your family.
We know how daunting and stressful it can be selling your home, even more so if you need to buy a new one at the same time! So, here are my top three tips for taking the hassle out of selling your home!
Pick a local, knowledgeable estate agent – we hear all the horror stories of using an online-only estate agents, from ridiculous valuations from untrained “experts” to zero communication once they have your money. Pink Street is a dedicated team, who will get to know you, ring you without prompt and ensure the whole process is as smooth as can be.
Do your research! Make sure you know what you are expecting from the sale, a rough valuation; look at what your neighbour’s paid/got for their properties. Sold prices are available online usually with 2-3 months of completion.
Be ready to exercise a little patience – even with the greatest will in the world, buying and selling property takes time. Jumping through hoops and getting past red tape can often feel frustrating. We do our best to reduce this frustration by keeping you involved in the entire process but patience will keep you sane while we finalise your sale.
So don't hesitate, get in touch today for your free valuation or use our online valuation tool!
This week Tom considers where power currently lies in the market. Is it a buyer’s or a seller’s market?
With mixed reviews in the news, London sellers are faced with offering huge discounts on their valuation and asking prices, while conversely Portsmouth has seen an excellent 7.1% growth in the market.
Fortunately, London is its own world. Or its own, autonomous, parallel property universe, which has no link with the rest of the country! Think of it like the Vatican City, it's geographically in Italy but not legislatively in Italy...
Right now it’s neither a buyer’s market nor a seller’s market. There is an average number of properties on the market and they are selling at an average pace so there’s not a saturation of properties for sale. A seller’s market refers to when there’s limited choice for buyers, whereas a buyer’s market is characterised by too much choice for a smaller number of buyers.
In 2016, we saw a seller’s market. In 2017 it was somewhere in between. Are we going to see a buyer’s market in 2018? I think we just might.
I am often asked should we go for the largest property we can get a mortgage for? Tom’s Take today will consider if there are any benefits to this strategy.
From a financial perspective, there will always be a limit on the value of your property. For example, you might spend £20,000 on an extension or a loft conversion but only increase your house value by £10,000. However, if you look at it from a life and living perspective, what does it matter? If you’re going to live in that property for the next 10 years, expand it to meet your needs. Work out how much the expansion would cost you over a 10-year period, would you rent that additional space in your house for £1000 per year? Personally, I believe you should do whatever you can to make your home comfortable and functional for your family. I will however caveat that last point, as it all has to be affordable. If you chose to use your mortgage to fund an extension, you may be able to cover the payments for now. But what if interest rates were to rise? If you read my recent Tom’s Take, market insight suggests that interest rises are a likely scenario in the current economic climate. Act with caution by calculating the worst-case scenario and budgeting for that. You should follow the same principle when buying a larger home. Work out what you want from a property and calculate the worst-case scenario. If you can afford that spectacular five bedroom detached house on Portsdown Hill if the interest rates rocketed, then in the words of Richard Branson “Screw it, let’s do it!”
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