Is It a Good Time to Sell a House?

With house prices forecast to fall in 2023, is now a good time to sell a house in the UK? Or should you wait until the property market stabilises? Will house prices fall and if so, by how much?

In this blog, we’ll help you assess the current housing market and weigh up the pros and cons of selling in the near future.

What’s happening in the UK property market right now?

2022 was a year of ‘two distinct parts’ for the UK housing market. In the first nine months of the year, we saw consistent growth in UK house prices and strong transaction levels across all parts of the UK. It was very much a ‘sellers’ market’ with more buyers looking to move than properties available to sell.

Despite rising inflation and the emerging ‘cost of living’ crisis, annual house price growth consistently exceeded 10% in all the regular house price tracking indices.

Then came the, now infamous, ‘mini-budget’ in late September 2022.

Whilst the government’s intention was honourable – to stimulate the UK economy by putting more money in people’s pockets so we would spend our way to growth – it caught everyone by surprise and the markets reacted very poorly to what they saw as an ‘unfunded’ ill-thought-out plan.

Since then, we’ve seen successive rises in the Bank of England base rate and steep increases in mortgage rates which have put a further squeeze on household incomes that were already struggling due to high inflation and energy costs.

The rapid changing of the guard at Number 10 and Number 11 Downing Street calmed the markets and restored some market confidence, but the dye was already cast for a significant change in the UK property market.

We have already seen the signs that we have moved into a ‘buyers’ market, with more sales falling through due to price renegotiations and Rightmove reporting the biggest dip in asking prices for four years in December 2022.

The number of houses being sold is starting to fall as more potential buyers are being ‘priced out’ of the market. The combination of higher mortgage costs, plus tightening lending criteria and wider pressures on household budgets means many prospective buyers are choosing to wait until they feel houses become more affordable once again.

So what does all this mean if you want to sell your property in 2023?

If you’d like a free, no-obligation valuation of your current property, contact House Buyer Bureau today. We use the most up-to-date information to value your home.

Will House Prices Drop in 2023?

Every property ‘expert’ is now predicting that house prices will fall in 2023. The estimated size of the price reduction varies between -5% and -20% with the Office for Budget Responsibility estimating a -9% reduction.

Every local property market has its own set of local factors that will affect local performance, but over and above this, the expectation is that there will be fewer buyers in the market in 2023 due to the cost-of-living crisis coupled with higher interest rates making housing and mortgages less affordable.

It is worth remembering that house prices have increased significantly in recent years, so even with a reduction they will still be higher than they were at the start of 2021, and no expert is predicting there will be a house price crash.

The latest predictions for 2023 are:

Halifax predicts an average reduction of 8% next year.
Nationwide predicts the reduction will be a more modest 5%
Zoopla agree that prices will fall by about 5%
Office for Budget Responsibility believes prices will fall 9% over the next two years
Capital Economics think house prices will fall by 12% by 2024

Will fewer houses be sold in 2023?

Whilst house prices are predicted to fall by an average of -8% in 2023, the volume of house sales is expected to fall by much more.

UK Finance – who represent the UK’s mortgage lenders – are forecasting a -23% fall in mortgage lending for house purchases and a -21% fall in the number of property transactions (from 1.2 million to c1m). They put this down to rising cost-of-living pressures putting pressure on affordability.

With fewer buyers in the market, the balance of power will shift towards the buyer and away from the seller. But this doesn’t mean you can’t or shouldn’t sell your house. But it does mean you will need to be more realistic with the asking price you set and be prepared to negotiate.

People will still want to sell, and buy, houses in 2023. The expectation is that we will see a shift towards more ‘needs-based’ selling and less ‘aspirational’ selling. People’s financial situations or changes in personal circumstances will mean there will always be a market for property.

If you need to sell, then you will. If you don’t then you might choose to wait until house prices have stabilised before putting your property on the market.

Top tip – If you do need to sell, then there are several things you can do to speed up your house sale in 2023.

When is the best time to Sell a House in 2023?

If you need to sell your house, then the answer is always going to be ‘now’ is the best time – particularly in a market where prices are expected to fall in the months ahead. When prices are reducing, if you delay putting your property on the market then you risk getting less for it.

Even in a market where prices are expected to fall there are ‘better’ and ‘worse’ times to list your house. The calendar below shows you what a typical year can look like.

Listing your house for sale in December and early January is going to take you longer to find a buyer – as there are fewer in the market. Ultimately this could result in you getting less for your house. The longer a house is on the market, the less it tends to sell for – recent analysis identified that ‘slow-to-sell homes’ sell for up to -17% less than the average.

The type of house you’re selling also makes a difference.

If you’re selling a one or two-bed flat/terraced house, then it is more likely to appeal to first-time buyers and young couples. These buyers tend to be more active in January, February, March, and September (not during summer holidays!)

If you’re selling three and four-bed family homes, then you’re best to put your house on the market outside of any school holidays.

And if you’re selling a bungalow then your target buyer will be elderly and looking to downsize – you’re best to list your house during warmer months.

How to speed up your house sale

Chris Hodgkinson, Managing Director of House Buyer Bureau has been buying and selling property for over 20 years. In the past 10 years, he has overseen over 6,000 house purchases and sales and has bought property in almost every local market up and down the UK.

With tougher market conditions expected for sellers in 2023, his top 3 tips to give you the best chance of selling your house are:

Set a realistic asking price – the biggest mistake sellers make is to set an asking price that is too high. In a market that is going to favour buyers, it can be tempting to start high and negotiate down, but the problem is that it makes your property look expensive compared to your local competition and prospective buyers will look elsewhere. Rightmove says properties that are priced correctly from the outset are twice as likely to sell. If you start too high and then reduce your asking price you risk prospective buyers thinking ‘What is wrong with that property? Why have they had to reduce the price?”
Choose the best estate agent, not the cheapest – Use a site like GetAgent to find the best local agent in your area. You want someone who will be proactive and work hard to get you the best sale. Saving £1k by using a cheap online agent is a fool’s game if they sell your house for £10k less than it is worth.
Don’t be afraid to explore alternative ways to sell – 2023 is going to be a tough year in the property market. There will be fewer buyers and they will drive a harder bargain. And it will still take
many, many months to complete a sale via an estate agent. If you need to sell and can’t afford to wait then explore alternatives like an auction or a direct sale to a property-buying company.

Our friendly property-buying experts will be happy to discuss your needs, explain how selling to us works and provide a free, no-obligation cash offer if you would like one. Get in touch today!

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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