‘Should I sell my Wandsworth, Tooting or Balham house now or wait to see how 2023 pans out?’ is a question we get asked a lot. There has been much volatility in the housing market since the pandemic. Huge demand for properties and house price hikes were followed by rising interest rates and borrowing costs, all of which has cooled the housing market over recent months.
If you’re thinking of moving house, you have a few decisions to make. Should you sell now in case house prices fall during the course of 2023? What would that mean if you’re looking to buy? And what about mortgage costs? While we understand a lot about the market in south west London, we don’t have a crystal ball – so we can’t give a simple answer as to whether now is the right time to sell. This will depend very much on your personal circumstances. However, we can look in detail at the factors that will influence your decision.
What is happening in the markets now?
UK figures from the major lenders and property portals do indicate that month-on-month house prices have fallen slightly. Annually, prices have risen, but at a slower rate than this time last year. However, the numbers involved are currently small with other factors at play. At the time of writing, figures relate to the traditionally slow December period and, for many commentators, these price changes reflect a correction of the market to more normal conditions after big price rises, post-pandemic.
What will happen during 2023?
Looking forward, according to Rightmove, prices are likely to fall by around 2% this year. This will, however, vary depending on local area conditions and demand for the type of property on sale. But if you are keen to sell, now could be a good time to capture the spring market before prices fall.
How do I know the right time to sell my house?
If you’re deciding whether now is the right time to sell your home, you need to consider two main things – market conditions and your personal reasons for selling. People have many reasons for moving home – a new job, a relocation, a divorce, the need for space for a growing family, selling an inherited property – to name just a few. Often these reasons will outweigh market fluctuations, so consider how important it is for you to make the move now.
Remember that the housing market is shifting rapidly, with political and economic changes having a major effect. Before you decide, you need to do plenty of research, checking recent sold prices on Rightmove, Zoopla and the land registry, reading the financial pages and having honest conversations with local estate agents. Find out how much properties like yours are selling for and how much you will need to spend if you’re looking to buy. Consider whether the right home for you is available in your price bracket, and whether you can afford the mortgage alongside the other costs of moving.
Is now a good time to sell a house?
In terms of the seasons, yes. Spring is the best time of year to find a buyer for your property with March top of the months according to Rightmove. Lighter nights bring out viewers and people are keen to move before the holiday season kicks in. Summer isn’t a bad time to move, though August is a slow month. Early autumn is a good time too, but things slow down in the run up to Christmas.
The rules are less hard and fast when it comes to seasonal sales than before the pandemic, however. The main thing to remember is that people will always need to move for the personal reasons listed above. So, if moving is the right choice for you, you will find a buyer as long as your home is well presented and marketed correctly.
Should I sell my house now to avoid negative equity?
If you are worried that your house will fall in value leaving you with a larger mortgage than the property is worth, you might be considering selling now in case prices fall substantially. This is an option, but there are a few things to consider. Assuming you have a mortgage of 90% of the purchase price, your home would need to fall by more than 10% for negative equity to kick in. In addition, negative equity is only an issue if you need to sell your home. Prices, especially in London, tend to rise in the long term. If you sell now, you will still need to buy another property with all the associated costs, and may find yourself with a higher mortgage rate.
Should I sell my house now or rent it out?
Alternatively, you may wish to rent your house out and wait until prices begin to rise again in future, taking advantage of the hot rental market. Bear in mind that if you do this, and look to buy a second place to live in, you will need to pay the stamp duty surcharge. Find out more about buying a second home in our blog.
Should I sell before buying?
You might decide to sell your home now in case prices fall. There are pros and cons to doing this. If you sell, you are in a good position to buy a property when the right home for you comes on the market. If prices do fall this year, you may also benefit from selling at a peak and buying when property is cheaper. However, if you have a fixed rate mortgage now, you may need to borrow at a higher rate. Also, bear in mind that there is high demand for rental property. If you need to rent while you look for a place to buy, you will face competition and landlords may prefer prospective tenants who are happy to sign up for a long lease.
As we’ve explained the question of whether to sell your home is a complex one to answer. If you’re mulling over this choice right now, talk to us. We’d be delighted to give you a current valuation of your property in Wandsworth, Tooting or Balham or elsewhere in south west London and talk further about the pros and cons of selling in today’s market.