- Hits: 415
Will the housing market crash? We have been asking the question for two decades now as prices have climbed to ever higher multiples of earnings. But apart from a few months in 2008 and early 2009, when prices did slide appreciably, it never seems to happen. Stock market corrections come and go but nothing will seem to dislodge housing from its inflated heights.
Having just gone through the most unlikely property boom in history, however – in which prices have surged throughout a pandemic – it is worth asking again. If we really have reached the end of the age of ultra-low interest rates that would remove the engine that has driven the long housing boom of the past three decades. You have to be in your mid-50s at least, now, to remember the days of double-digit mortgage rates. It is safe to say that today’s house prices would not be sustainable in such an environment. Many people would be spending their entire salaries servicing their mortgage.
If you are waiting for a housing crash in order to get your toes into the market, however, don’t get too excited. With inflation at a 30-year high, the Bank of England’s base rate is widely-expected to rise further from its current level of 0.5 percent – the bank’s monetary policy committee only narrowly voted against raising them to 0.75 percent at its February meeting. Markets, however, are not expecting rates to peak at much higher than 1 percent. And, with the global economy in shock from the invasion of Ukraine, don’t be surprised if further rises in rates are suspended for the moment as the Bank begins to wonder whether the world could be thrown back into recession, with all the deflationary forces that would entail.
Are conditions right for a crash? Relatively fewer properties are now held on high loan-to-value ratios than in the past. The era of 95 percent mortgages effectively ended with the credit crunch in 2007, since when only a limited number of such loans have been issued, mostly to first-time buyers under government incentive schemes backed with taxpayers’ money. In the second quarter of 2007, 52.4 percent of mortgages had a loan-to-value ratio of over 75 percent, 9.3 percent were over 90 percent and 5.5 percent were over 95 percent. The corresponding figures for last year were 40.3 percent, 3.9 percent and 0.3 percent. Moreover, more homes are now mortgage-free than was the case during past property booms – the number of properties held with no mortgage overtook the number of homes with a mortgage for the first time in 2013/14. It means there will be fewer distressed sellers than was the case in the past , even if interest rates do rise appreciably.
On the other hand, a third of homes are now owned by investors rather than owner-occupiers – and the regulatory and taxation environment for them is becoming increasingly hostile. George Osborne began to discourage buy-to-let investment with a three percent surcharge for properties bought as anything other than a main home. Since then, the government has withdrawn tax advantages and piled on costs for investors. Now, landlords are steadily being forced to upgrade the Energy Performance Rating of their properties before being allowed to let them – which could land investors with bills of tens of thousands of pounds in the worst cases. So, might investors be inclined to get out of property, dumping huge numbers of homes on the market?
One certainty house owners can rely on is that the government and bank of England will act fast to prop up the property market at the first sign of a collapse, just as Rishi Sunak did by introducing a stamp duty holiday in the early months of the pandemic. Already this week the Bank of England has proposed to relax the 'stress tests' that banks are expected to apply when deciding on mortgage applications – with the result that borrowers could find themselves able to take out larger mortgages, and applying inflationary pressures to house prices.
Compared with the stock market, things happen at glacial pace in the property market. We don’t have daily property market index like we have a FTSE index. It is a much longer and more expensive process to sell a property than sell a bunch of shares, which means we are unlikely to see panic grip the property market in the way it often does in stock markets. Where people have invested in property it has often been with the intention of remaining in for the long haul. Many landlords can be expected to bear quite a lot of pain before they are moved to sell.
All of which makes a housing crash less likely than a stock market crash. By the same token house prices rarely rise with quite the enthusiasm as a surging stock market. For now, conditions do not look good for further rises in the housing market, and stagnation in prices is looking more likely. That said, few would have imagined the strength of the market over the past couple of years – so I wouldn’t want to bet against a rising housing market.
- Hits: 943
So, you’ve been searching the internet like clockwork. You have signed up to automated emails highlighting for you of all the new properties on the market. You have even registered with all the local estate agents and given them a thorough breakdown of what you are looking for and the exact locations on your wish list. Yet, although you have done everything right, you are still having problems finding your next home. Why? It just doesn’t exist! If only I got a £1 for every time we were asked to simply move your dream house to different location!
The trouble is by doing that the property you love will more than likely be out of your budget. When you start your search you need to be realistic and do your research. What properties are available within your budget, and where are they located?
One of the biggest mistakes a person can make is giving too much weight to the photographs of a property. We work hard to ensure that the images you see are eye-catching and encourage you to view, but always remember a photo will only tell you half the story of a property. Nothing can prepare you for standing inside a space and seeing it with your own eyes. That feeling, the one that says you are home, is an experience which occurs only whilst you are stood within a property’s walls.
The perception you create of a property from photographs alone could be misleading; don’t make up the fiction of a property before you have been and discovered the facts for yourself.
Let’s talk about your list. You think you know what you want. You may have dreamed of it for many months, but it is only when you actually start viewing properties that you can start to ascertain what you really need. Go and view a variety of properties, even those that wouldn’t normally make your list, you will be surprised how much your list can start to change the more property you view. This way you will end up with the right home, rather than the one you think you want.
Have you ever thought that you may not actually be ready to move home? It may sound a strange thing to say, but if you are not mentally there yet no property will make the grade. You may have a strong emotional attachment to the property you’re living in and be finding it hard to say goodbye. Or you might simply be feeling overwhelmed by the entire process. Please don’t struggle alone, come and talk to my team about your concerns; we’ve met people in similar situations and just want to help, even if that means you taking a break until you are ready. If you’re in the process of looking for a new home, be honest with yourself. Are you being realistic? Are you keeping an open mind or being swayed by your perceptions of a property?
Go and see those ‘wild cards’ and if you’re not ready, that’s fine. Your search should be fun, so if you’re struggling come and chat to our team and let us help you find that property you can call your home.
- Hits: 827
One of the most common questions we get asked by sellers is “how many buyers do you have on your
books for a property like mine?” Some people get too fixated on this question when deciding
which estate agent to select.
Here’s the thing: IT DOESN’T MATTER
In reality, although an agent may have a register of potential buyers, the chances are the best buyer
for a property will be someone new, who sees it advertised.
Therefore a more relevant and important question would be “how are you going to present and market
my property to ATTRACT the buyers who aren’t on your books?”
We say this because for every one potential buyer an estate agent has on their books, there are at
least 10 who aren’t.
Sometimes the buyer hasn't even notified the estate agencies in an area to register their details,
instead they see it pop up in a Facebook campaign, on Rightmove, Zoopla or even in our
Its the sellers who really need the estate agent and that estate agent should be in tune with the way
buyers now search and adapt their approach accordingly by using, to name a few, professional
photography, premium marketing on all the property portals, respond to emailed enquiries within 1
hour, not 1 day etc etc.
So, don’t worry about how many buyers they have on their books… picture yourself as a buyer and
think about what you would want to see and hear!
- Hits: 1143
If you are considering putting your house in Exeter up for sale, but are not sure where to start, there are methods you can follow to help ensure it is fresh and market ready.
Not just for new build show homes, you should consider staging your home, or to put it another way, setting the scene to arouse immediate buyer interest in your property when it comes to market.
To be truly effective, you’ll need to look at staging both the inside and outside of your home, so here at Robert Williams we have put together our seven top tips to get you started and on the road to staging your home like a pro.
This is one of the most necessary things you can do. You’re going to be moving home anyway and will have to pack, so it makes perfect sense and is a straight-forward job to declutter and start packing at the same time. Pack up everything you don’t need and store the boxes out of sight in the garage if you have one, or consider temporarily renting a small storage unit. Keeping the look minimal can help sell your home.
Whilst we don’t like to think of strangers opening our cupboards, the reality is that they probably will. If you have built-in wardrobes, hang similar colours and garments together because this will make the cupboards look bigger. An organized space always appears larger, and you want your cupboards to look as tidy and spacious as possible.
You should de-personalize your home as much as possible when preparing to put it on the market. This is so that potential buyers can imagine themselves and their own belongings occupying the space. This means minimizing and putting away everything you don’t need or currently use. Clear kitchen worktops as much as possible, stash away all those gadgets and appliances and put miscellaneous small clutter in a few attractive baskets or boxes out of sight.
Look from the Outside
Stand on the street outside your property to see the view your prospective buyers will get as they approach your property in Exeter. Be aware of any negative impressions they may get such as overgrown borders, peeling paint, broken windows and so on. A poorly maintained exterior will make a prospective buyer think that the house has not been well taken care of. Even if you have spent the time and money to ensure the interior is amazing, it will all be wasted if the prospect gets a bad first impression as they approach your property.
What do you really see?
Step outside your front door and close it; then stand on your step and simply look around for a couple of minutes. This might appear to be a strange thing to do, but it is mimicking the likelihood of your estate agent fumbling around for keys before finally opening the door!
During this time, you will see exactly what your potential buyers will see. So, what is it? Cobwebs on the door frame? Dead plants? A broken lightbulb in the porch? A less than shiny letterbox? First impressions count, so it’s worth taking some time to clean up. If you want to go a step further, consider painting the front door or adding new accessories.
Don’t forget the back garden
A tidy and inviting back garden is just as important as your front garden, so don’t neglect it. Whilst it might not be part of the potential buyers first impression experience, you should make sure it is in the best condition possible. Pull up the weeds, water the plants, do some sweeping and maybe even purchase new furniture or accessories such as plant pots or bird houses. This all adds to the vision of ‘living the dream’ your potential buyer wants.
The biggest tip of all
Simply imagine yourself as a potential buyer looking at your property in Exeter for the very first time. See it through their eyes and ask yourself:
- What impression does the house give you?
- How is its kerb appeal?
- Would YOU buy your house?
- What would you like to see that’s different before you put an offer on your house?
Finally, to stage a home will cost money but you’ll get that back, and often more, when your property sells. Proper staging will help you sell your house in a shorter time and importantly at the price you want.
For expert advice on showing your home in Exeter to its full potential, contact the team at Robert Williams on 01392 204800 today