When it comes to buying or selling property, timing can be key. Putting your property up for sale when the market is hot could lead to a big sale. However should the market change, it can be beneficial to get your property on the market before the competition gets their game together. With this in mind, often now is as good a time as any to put your property up for sale. Of course, if choosing to do so you will need to consider your asking price carefully. It is wise to do as much research as possible, as well as seek advice from professionals. In this article we outline the best ways to gain an accurate insight into the current selling climate and introduce a new online tool which can help UK sellers to do so.
Weighing up the current market
The ‘seller’s market’ is one that favours sellers over buyers – that is, the odds of sale are skewed in favour of those selling. This is usually a result of high demand for property in the area, good selling conditions and a limited supply of available homes. There are more purchasers than homes for sale.
As a seller, this puts you in a strong negotiating position. Of course, your chances of selling quickly and for a good price are never guaranteed. But they are certainly higher in such a market. It follows that when looking to sell your home at a good price or purchase property as a project to sell in the future, consideration of the current seller’s market is important.
Temperature is used as metaphoric descriptor of the current ‘climate’, wherein a seller’s market is classified as ‘hot’. In a so-called ‘cold’ or ‘buyer’s market’, it is still possible to sell well with the right strategies in place and if you target your property correctly. There are almost always buyers out there they are just likely to be more price sensitive. Whether you are operating in a red-hot sellers’ market or a slightly colder buyers’ market, marketing a clean, attractive, well-maintained house is really important to increase your chances of selling. Being on-trend in terms of interiors and design can also help. Then strong communication skills at viewings improve your chances too.
The seller’s market as a forecast
It is always good to do your research and seek professional advice. Potential sellers can do their own initial research using ‘PropCast’ via the TheAdvisory website. This online tool generates a report on the current buyer demand which can help potential sellers to find out how quick and easy, or slow and difficult it might be to sell their property in the current market climate. All that is needed is to type the postcode in and they can find out how ‘hot’ the area currently is for selling properties.
What does PropCast measure?
As already referred to, the temperature metaphor is often used when describing property markets. The creators of the PropCast tool adopted this in their decision to use a degree to express a percentage. The status of local markets are allocated as follows:
- 0°-25° = very cold / extreme buyers’ market
- 26°-34° = cold / buyers’ market
- 35°-49° = hot / sellers’ market
- 50°-100° = very hot / extreme sellers’ market
The methodology is used to obtain a quick but reliable indicator of market heat and is the same as that used by; professional property traders, corporate asset managers and developer part exchange providers. The tool calculates ‘Sold subject to contract’ (STC) and ‘Under Offer’ properties as a percentage of ‘total stock’ for sale, down to postcode district level. The raw data used is supplied by 3rd party property market data specialists. Unfortunately it does not report on Scottish or Irish markets yet but covers all of England and Wales.
There is concern amongst professionals that if vendors now know they are in a buyers’ market, this may prevent them from trying to sell. Providing vendors with such transparency about market conditions could be bad for the estate agent business. However, in reality, the decisions of many house sellers are driven by changes in personal circumstances such as births, divorces, deaths, marriages etc. By providing people with data from PropCast, we may help them to align themselves with the market and achieve their moving goals at the first attempt. This could improve the efficiency of the market by increasing transaction levels and overall liquidity in the market. What is more, as we said earlier in this article – even in a cold seller’s market, there are almost always buyers out there.
Whilst this online tool provides a very convenient and accessible tool for assessing the selling market, we recommend using it as a guide. The data it provides is certainly a useful indicator of the current market but there is no metric that will guarantee you a sale. Keep your eyes and ears open: window shop at local estate agents and speak to neighbours and residential property professionals.
The current climate in the sale of London homes
It is always good to do your research and seek professional advice with regards to every aspect of selling your property. Market demand is influenced by many things including word of mouth. It is for this reason that it is recommended to update market reports on a monthly basis – because they can change so much.
As with many aspects of the UK economy, the prospect of Brexit has cast doubt in the minds of many working within the property industry. With the slow moving nature of the Brexit negotiations taking place, there is a high level of uncertainty and speculation as to exactly what impact our departure from the European Union will have on UK economy. As frustrating as it is, no one will be sure until everything is agreed and the ‘dust has settled’ post Brexit.
As a result, amid the present uncertainty, fewer people view housing as a good investment on the whole. High average house prices relative to household incomes have priced many people out of the market in London previously. Now in the present political environment, the rate of current house price growth here has decreased recently. A bad prospect for property sellers but a good short-term prospect for investors and those looking to buy their first property…
London house prices are reported to have decreased for the first time since 2009, whereas prices elsewhere in the UK have risen. Although buyers may be more price sensitive, with the right strategies in place and by targeting your property correctly, it is possible to sell well in a cold seller’s market. Whether you are operating in a red-hot sellers’ market or a slightly colder buyers’ market, marketing your property well will significantly improve your chances of selling. What is more, even in a cold market, if the seller is also a buyer then they financially benefit from this market place (provided they are moving up the ladder).
For example, if they sell a property for £500k at 10% less, equating to a 50K loss and considered buying another property for £1m also at 10% less, then this equates to a £100k saving making them £50k better off selling in a cold market. This is an important point that is often overlooked but can be an extremely lucrative approach to property investment amidst a cold seller’s market.
With twenty-seven years of experience in real estate of South West London, James Anderson are the longest established independent estate agents in SW13, SW14 and SW15. Their friendly team of experts have helped thousands of people to successfully buy, sell, let and rent their homes and properties in Barnes, East Sheen, Mortlake, Putney and Putney Hill.