So 2022 has started as 2021 ended. A shortage of stock for sale, numerous buyers chasing the same properties, agents left with no option but to set best offer deadlines and resultant tears of joy or disappointment depending on the outcome. So where is this all leading us?
I don’t think anybody really knows be they experienced property professionals, highly qualified economists and bankers or avid followers of Rightmove or OnTheMarket. We are in uncharted waters. This time last year, widespread vaccination was just starting and the unexpected bounce from the chancellor’s stamp duty holiday had yet to take hold. And two years ago, COVID-19 was largely unknown with the first two cases of the infection in the UK being identified in York on 30 January 2020.
Throughout these uncertain times, interest rates have remained at record low levels and even with the recent increase in base rates, be this to 0.5 or even a little higher, will this materially affect the housing market when according to UK finance, 74% of all current mortgages are fixed rate? As with other commentators, I suspect the market will start to cool as sentiment reflects this upward movement however modest it may be in real terms. And I am sure some might say it is no bad thing especially if you were one of those who sold well in the frenzy of last year and are now living in rented accommodation thinking you would be buying from a position of strength but yet the reality has been far from what you expected. If so, don’t give up hope.
Since New Year, estate agents in all sectors are reporting a marked increase in market appraisals and advice to those who are contemplating selling in 2022. For buyer and seller alike, as with many things in life, it is a question of timing. And so, if you will excuse the obvious pun, to save some of you going around the houses, perhaps the following might be helpful advice.
For sellers, please don’t be seduced by a high number of viewers and then automatically assume you will sell with competition and achieve a better price than you expected. Look carefully at each buyer’s circumstances. Do they still have a property to sell? If they say it’s sold, does that mean they have already exchanged contracts or simply accepted an offer last week and there is a chain of associated sales. You may well find that a slightly lower offer from another buyer is the better option even though it’s not the highest monetary consideration.
And if you are buying, please be open and honest about your funding arrangements. There are some interesting interpretations at the present time as to what constitutes being a cash buyer. Equity and a mortgage does not make you a cash buyer, much as you may think adding a loan from the likes of Santander to your own resources means you are.
And if you do have a property to sell, for your own sake let alone anyone else’s, please be realistic as to when you expect your own sale to go through. Telling an agent you are a cash buyer and your property is sold and you can exchange within a month is pointless when in truth, you do require said mortgage and your buyer hasn’t even put their house on the market.
While this may sound cynical, this is because the above scenarios are too often an occurrence at the present time, as other agents will no doubt testify.
Tim Waring FRICS is head of residential at Lister Haigh in Harrogate