Sarah Beeny
House prices have taken their biggest monthly drop since 1992, according to Britain’s largest mortgage lender the Halifax.
And with a gloomy picture of desperate sellers and very few buyers, estate agents believe worse is to come – and are expecting further falls in the next quarter.
Last month property prices fell by an average of 2.5 per cent, says the Halifax. But some areas recorded falls of as much as five per cent. In the last quarter of January to March this year, the number of homes sold by the average estate agent was 22, close to the all-time low of 18 in 1992.
The number of unsold homes sitting in estate agents’ windows has increased by 50 per cent in the last year, while enquiries from buyers have fallen for the 16th consecutive month.
So what can you do if you’re a desperate seller or a hard- pressed buyer struggling to get a mortgage?
KAREN ROCKETT speaks to a seller and a buyer who have managed to survive the current market and asks TV property guru Sarah Beeny how you can survive – and maybe even beat – the current conditions…
IF YOU’RE SELLING..
1 Be realistic about the price
YOUR expectations should be lower than they were six months ago. Don’t look at it as money you have lost. Look at it as money you never really had. Prices then were over-inflated.
2 Cut the price for a quick sale
IF you want a quick sale, price your house for slightly less than the going rate for similar properties, particularly if there is a glut of them on the market in your area. If lots are on for say £250,000 put yours on for £245,000.
3 Use one agent
IT is false economy to go multi-agency. They won’t work as hard for you. Make sure you have a board up and the details of your property are online as well as in the local newspapers etc.
4 Are you asking too much?
EVEN though the market is slow, if you haven’t had at least three viewings in the first three weeks you are asking too much for it.
5 Avoid botch DIY jobs
BUYERS these days are savvy and won’t be fooled by a lick of paint, so don’t waste time and money on botched cover-ups. If you are going to carry out an improvement do it properly. Otherwise lower the price and let someone keen on their own DIY buy it.
6 Clean the property thoroughly
CLEAN your property thoroughly throughout – smells of dogs, cigarettes and babies, and general grime will not get you a sale. If you live in a dirty home and can’t or won’t clean it properly – then get someone in to clean it professionally.IF YOU’RE BUYING..1 Don’t bank on a bargain
DON’T get carried away by all the talk of dropping prices. Many properties are holding their value so don’t necessarily expect a bargain in every case – or you’ll be disappointed.
2 Is it really that good value?
JUST because something is on for less than last year doesn’t mean it’s a bargain. New-build flats in city centres were in many cases over-priced, and I would question if they are a bargain even if the price has dropped considerably.
3 Always gofor a repayment mortgage
GO for a straightforward repayment mortgage rather than an interest-only one. Interest-only are fine if you plan to save alongside them but if that isn’t realistically going to happen then at least with a repayment mortgage the property is yours at the end of 25 years.
4 Put down as big a deposit as you can
YOU will be hard pressed to get a 100 per cent mortgage in the current climate, but even if you could it is madness not to put something down. If you can’t save up for a deposit then I would question whether you can really afford to buy your own home, and would be better off renting.
5 Stay clear of buy-to-lets
MANY repossessions are buy-to-lets because people are realising that nowadays the figures just don’t stack up. The returns are too poor and they find themselves making up the shortfall in the mortgage every month.
6 Do your homework on the area
IT is important that you do your research thoroughly. Make sure the area has all the things like shops, schools, medical centres and is on transport routes, as it won’t be very sellable without the infrastructure – or much fun to live there.
TEACHER Rebecca Pearce and her husband Adam, both 26, have just bought their first home, a two-bedroom cottage – for £7,000 less than the £200,000 asking price.
Although it was a struggle getting a mortgage for the property in Plympton, Devon, Adam says: “We have been very lucky not only to buy a house we couldn’t have afforded this time last year, as it would have cost us another £25,000, but to get a mortgage in the current climate too.‘We saved £7,000 buying’
“We put down a five per cent deposit and got our application accepted just in time – most lenders want 10 per cent now.”
Adam, a surveyor, adds: “Although we wanted to buy our own home I would be lying if I didn’t say I wasn’t worried about the current house price situation.
“We could lose £10,000 on the value of the house very easily and very quickly, so we try to look at it that we would have been losing £7,000 a year renting anyway.
“We have gone for a quality middle market property rather than one at the bottom end in the hope that it will hold its value and is easy to sell.”
Nelva Pena, manager of Fox & Sons estate agents in Plympton, says: “This time last year the house the Pearces are buying would have gone for around £220,000. Now we are finding only those properties that are realistically priced are selling.”
Fox & Sons: 01752 344349 or email plympton@sequence home.co.uk
‘It took me a year to sell’
OFFICE worker Sue McGuinness decided to sell her three-bedroom semi after her daughter Amy left home for university.
She bought the house in 1984 for £25,500 and was told it was now worth £129,000. But it took her over a year to sell – and when she finally completed on the deal it was for £17,000 under the original asking price.
Sue, 50, who now lives with her partner Paul, says: “The housing market had started to slow down but I had absolutely no idea how hard it would be to sell.
“I was living on quite a sought-after private housing estate in Derby so I assumed there would be no problem with selling, especially as I wasn’t in a chain.
“But after three weeks I still hadn’t had any viewings. Just as I was starting to get concerned I had two at once. But neither made an offer.
“The agent warned me that the market was slowing down – and for months nothing happened. Then in November a lady came to look at my house three times. The agent warned me that her budget didn’t stretch to my asking price but I hadn’t expected her offer to be quite so low. She finally put in an offer for £112,000. I couldn’t believe how much less it was but after much deliberation I decided to accept.
“I decided I didn’t have much choice as I had hardly been swamped with buyers. The sale went through and we completed in January.”
Sue adds: “It’s definitely a buyer’s market… assuming they can get a mortgage, that is!”
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