Sellers must adjust their expectations and get used to life after record house price rises
The prospect of selling your home in 2015 is blighted by election fever and nervous buyers. London has overheated while prices in the commuter corridor speed up.
How do you sell your home when others don’t?
Get the best price by dropping it
Estate agents are coy about this, but some report that they are cutting prices on up to one third of their sales list, and London is affected more than most.
There is a lot of unsold stock from last year but all agree that this is normal for January. It doesn’t mean the market is falling, rather that sellers’ expectations are too high.
“Anyone who has rested a property over the winter, hoping to relaunch it in the spring, should be doing it right now,” says Guy Lashmar of Hamptons International.
“And they should adjust the price. This is partly because Londoners early last year were selling at record prices and coming out of the capital with big budgets. Now London prices have softened, and the spring market is going to be competitive,”
So we might find that people who were hanging on to their houses in Wandsworth or Fulham are now willing to sell and make the move.
This shows up in figures from country offices.
Despite news from Rightmove that it is took longer to sell a home in December, Strutt & Parker in Canterbury, had a 5pc increase in buyers in the middle week of January compared with the same week last year, and 12pc more invitations to value houses. Maybe the market is on the move.
Neil and Nikki Churchill are convinced a price drop will work for them. They are selling The Manor House, a former coach house near Uckfield in East Sussex, which Neil himself transformed into a seven-bedroom, seven-bathroom mansion.
“Everything in it is new,” he says. “It is full of new technology and expensive stone from all over the world.” His love of hi-tech extends into the bathrooms, where you only have to stroke the baths to control the lights or music.
They hope to move to Kent and buy an old farm, so they put their house on the market last year at £1.995m but have decided now to cut the price by £200,000 with Hamptons International (01444 316795, Hamptons).
“We are going with a big hit at the beginning of the year, a sizeable drop to get tongues wagging. There is nothing else out there like it,” says Neil.
The Churchills are giving a price drop a go (Philip Hollis)
Question your estate agent
Examine the fine grain of your sales strategy.
“You need to look at how long the property has been for sale, how many viewings it has had, and find out from your agents what people say and don’t say about it,” says Ed Church of Strutt & Parker.
Analysis of how much time people spend looking at your property online is revealing. “If you get lots of hits online but no viewings, it could mean that the location is popular and the type of house is desirable, but if they don’t seek more detailed information it means the property is probably too expensive,” says Church. “Or that all the rooms are painted pink and they don’t like it.”
Technology sometimes doesn’t help. “The Google-effect can be a problem because people check maps online and think there is a motorway too close, when in fact it is half a mile away and there is a hill in between. It is like falling in love with a person. You need to meet them, not just look at their Facebook page.”
Seize the moment
If you get an offer, don’t hang about. There tends to be a surge in property hunters at the beginning of the year as people act out their New Year resolutions.
In Fulham, January has been hyperactive compared with December when people spent their time partying and shopping.
“In December we could make 30 calls and not get a single answer,” says Mark O’Neill of Knight Frank. “In January the number of buyers looking for new houses often increases by 50pc or more.”
On cue, a house in Whittingstall Road has just gone under offer. It originally went on the market with another agent in the summer, priced at £2.75m.
By September the sellers had changed agents to Knight Frank and in November the price went down from £2.5m to £2.4m. There were nine viewings in November and three in December.
But in the second week of January there were 13 in a week and a good offer arrived on the table. “Now is the time to sell because there are lots of new buyers and we have very few new properties coming to the market,” says O’Neill. But buyers, he says, are no longer prepared to pay record-breaking prices, so sellers must be pragmatic.
Mind the election
The general election on May 7 just happens to be in one of the most important weeks in the property market calendar.
More houses are launched then than at any other time of year.
So it will not only be a lost weekend but possibly a lost month for sellers.
Previous elections show that the market slows down around six weeks beforehand.
How important is it? “Property has shot up the agenda and become more politicised since the credit crunch,” says Lucian Cook, head of residential research at Savills.
“While stamp duty changes will boost demand in the mainstream market, at the upper end the changes will combine with the threat of mansion tax to make buyers at £2m very cautious. Sellers have to make a call on whether to sell before the election with that threat in the air, or take a punt and sell afterwards.”
Take it off the market
Sellers often feel their properties go stale after a few months sitting in estate agents’ windows, but Lindsay Cuthill, head of country houses at Savills, thinks they should persevere.
“I would remind them that if you are a buyer looking for the first time, then it is all new and fresh and you want to see as much as you can. The first question people ask is not how long has it been on the market. By the time they ask that, they are usually a little bit hooked.”
If a property lingers, buyers can start to suspect there is something wrong with it. “It may mean that there is an opportunity to make an offer as the seller could be flexible on price,” says Cuthill. “At least we can get a conversation going to see what is possible. I’m afraid that if your house has been on the market for six months, then you are joining the club. You are not alone.”
Catch a commuter
The London ripple effect will continue to propel people out of the city into the country this year. “The half-hour to one-hour commuter zones have been one of the best-performing markets,” says Johnny Morris, head of research at Hamptons International.
His research shows that in 2014, some 58,000 Londoners bought homes outside the capital, spending £21 billion – twice what they spent in 2013.
“Over the downturn many Londoners delayed life-stage moves, restricting the natural flow of families out of the capital and building a pent-up demand,” he says. Around 80pc of those who made the move have chosen the commuter belt.
Ignore the forecasters
The pundits talk of price increases but this can be distracting. The country is made up of many micro markets, all of which behave differently. Analysts at JLL predict average national price rises this year of 4pc, with prime central London going up by 1.5pc, Greater London 5.5pc and the South East 5pc.
“House price predictions neglect to look at the number of transactions, which is really the best indicator of how the market is working,” says Hamptons’ Johnny Morris. “It tells you how liquid the market is. The more transactions there are, the better it is for the economy.”
Price levels matter hugely to people buying their first property and those ending their housing journey. To those moving within it, higher prices are simply carried forward to the next property. “If your two-bedroom flat is going up,” says Morris, “then so is the three-bedroom house you want to buy, and when you make the move your mortgage debt steadily increases.”
In a market like this, sellers are vulnerable to sharp-eyed agents offering to revalue their homes and slap higher prices on them.
The truthful agent, albeit a high street agent, or an online agent, is likely to tell you that making a sale this year will be harder than last.
Rightmove counted 10pc more page-views in the first half of January than the same time last year, and predicts that election jitters and restrictions on lending will make this the year of “the selective mover”.
Last year, Glenda Cormack and her partner Mike Acklom tried to sell a Grade II*-listed house called The Old Manor at Dunster in Somerset, full of Tudor beams and flagstone floors. It came with a four-bedroom Edwardian pavilion; the whole package was valued at £1.5m.
Now they have decided to split the property and sell The Old Manor at £750,000 through Strutt & Parker (01392 215631; Strutt & Parker) and Stags (01823 256625; Stags).
The pavilion is being sold separately at £475,000 through Webbers (01823 322666; Webbers) in Taunton. “Webbers taps into the local market and has completely different buyers to the others, who tend to attract people from outside the area,” says Glenda.
The idea to split the property came from Ollie Custance Baker at Strutt & Parker, who thought they needed a fresh approach. Glenda is suffering from buyer fatigue. “The trouble is the buyers. They think they would love a manor but they have never heard of Henry V, their high heels aren’t suited to the house and they know nothing about running a place of this size,” she says.
Source: The telegraph