I told you so…
When she was property editor at The Telegraph Anna White wrote a piece in August 2014 in which she questioned the prevailing wisdom that the market could continue to roar ahead, stoked by Government initiatives like Help to Buy and continuing record low interest rates. She had spoken to agents, research folk and to lenders and it was becoming clear that there was some nervousness. Anna also included a comment from me, something I have been repeating to clients ever since. “It’s fine to buy in central London now so long as you appreciate that what you buy will be worth less tomorrow unless you are canny.”.
So what does this mean for the market outside the M25? Well, agents, developers and buyers all seem to be still partying in places like Manchester but experience tell me that what starts in the South East eventually infects the rest of the country. It may take another eighteen months to do so but I expect the current correction in the Capital to leach out into the country.
The question then is “when should I buy?” to which my answer unhelpfully is “it depends”. If you are trading in the same market then it makes little difference. What drags on your sale should help you to negotiate a better deal on what you buy. What I would advocate is that this is probably not the year to be long in residential property. Sell first, get your money ready and when you have then go shopping. One third of homes for sale have reduced their asking price, sellers and agents are on the back foot, this is turning into a buyers market for those properly prepared. “Prior preparation…” as the saying goes, should help ensure your move goes smoothly.
Twelve months ago I think the spread between what a good estate agent could get for a property was perhaps 10% more than a poor agent in a rush might achieve. Today I think that spread is as much as 20%. Sell in relaxed, realistic manner and you can still get top dollar. Bid for your next home with confidence and with the money either in the bank or with a formal mortgage offer and you’d be surprised how many sellers will capitulate and take what might have been considered a derisory offer.
Predicting the market is a fools game. I happen to have been lucky in 2007 and in 2014 but if you have any ideas as to what the market might do in 2020 then please, let me know. I’m happy to take all the credit – if you’re right!