Selling a house in a slowing market

When it comes to selling a house, the wider property market plays a big role.

In a seller’s market, like the one we’ve seen since the post-covid stamp duty holiday, homeowners can be ambitious with their asking price, knowing that they’re still likely to have buyers battling it out to get their offer accepted.

In a buyer’s market, like the one we now find ourselves in, you need a different marketing strategy.

Why has the market changed?

The property market pretty much ground to a halt during the first covid lockdown. All viewings were stopped, surveys couldn’t be conducted, and no-one listed any properties.

In an attempt to add a shot of confidence to the market and get it moving again, the government introduced a stamp duty holiday in July 2020. This meant homes up to a value of £500,000 were exempt from paying stamp duty.

The measures worked to encourage buyers but, with many would-be sellers still feeling cautious, demand far outstripped supply. This imbalance created a very competitive, over-heated market and, in some areas, resulted in property price growth of up to 30% across a 24-month period.

Something that helped to enable such a high level of growth was the record low Bank of England base interest rate. It meant borrowing was cheap and fairly easy to secure.

Last summer, we began to see the market turning. The economic fallout from a global pandemic, the war between Russia and Ukraine and growing political turmoil all contributed to rising inflation and, in turn, rising interest rates. The mini-budget introduced by Truss’s short-lived government was disastrous for the property market, sending mortgage lenders into turmoil.

Overnight, would-be buyers saw hundreds of pounds added to their proposed monthly mortgage repayments, and existing homeowners realised their mortgages would become a lot more expensive when their current fixed deal ended. Moving house suddenly became the last thing on a lot of people’s minds.

What will happen to the property market in 2023?

Property expert Danny Luke says: “2023 is likely to be another tricky year for the property market. Most experts agree that we can expect to continue to see property prices falling over the next 12 months. Although the Bank of England is likely to raise interest rates again, we should see more stability within the mortgage market, as most lenders have already factored in further predicted rises from the Bank of England. The consensus seems to be that interest rates on most mortgage products will settle at around 4-5%. Although not as high as many people feared after the mini-budget, mortgage interest rates at that level will be significantly more expensive for both homeowners and would-be buyers, and will undoubtedly have a big impact on affordability and, consequently, property prices.

“If you’re hoping to sell a house in the next year, my best advice would be to price your home attractively and ensure it’s looking its best. It’s going to be a tough market for sellers, and any buyer in a position to move forward with a property purchase in 2023 is going to be able to afford to be picky and drive a hard bargain. Gone are the days of expecting offers above asking price, so you’re going to need to be open to negotiating and being realistic about any offers you receive.

“That being said, there are those who still have a strong need to move, and there is still a shortage of available homes, so the market will find a new balance. To be successful, it is important to be realistic about the market and how it’s changed in recent months.”