Tag: sale home

Posted on

Is Sale a Buyers’ or Sellers’ Property Market?

A Comprehensive Guide for Sale Homeowners

In the ever-changing world of Sale property, the terms ‘buyers’ market’ and ‘sellers’ market’ are phrases bandied about.

These property market conditions can significantly impact your ability to buy or sell a Sale property, regardless of which side of the fence you find yourself on.

As a Sale estate agent, I will provide you with a detailed analysis of the Sale property market to find out if we are in a buyers’ or sellers’ market and offer valuable tips to navigate through them successfully.

Additionally, I will shed light on a lesser-known market condition called a ‘balanced market’. So, let’s delve into the nuances of these markets and equip you with the knowledge to make informed decisions on buying and selling in Sale.

What is a Sale Buyers’ Market?

A ‘buyers’ market’ occurs when the number of Sale homes available for sale exceeds the number of potential buyers. In this scenario, buyers hold the advantage, as they have more choices and can take their time to make decisions. They may even negotiate with sellers to secure more favourable prices. This is an ideal market for Sale buyers as attractive deals are plentiful, while sellers face the challenge of standing out in a sea of properties for sale.

What is a Sale Sellers’ Market?

Conversely, a sellers’ market arises when there is a higher demand for homes than available inventory. This creates a power shift in favour of sellers, who can benefit from increased competition among buyers. In a seller’s market, Sale properties tend to sell quickly and sellers often receive multiple offers, driving up property prices. This market can be challenging for Sale buyers, as they may face bidding wars and have limited negotiating power.

Introducing a Balanced Market.

Apart from the buyers’ and sellers’ markets, a balanced property market exists where the number of people looking to sell property matches the number of potential buyers. In a balanced market, equilibrium is achieved, leading to stable prices and a reasonable timeframe for property sales. This market condition offers a fair playing field for both buyers and sellers, creating a more harmonious real estate environment.

Understanding the Dynamics: Supply and Demand of Sale Property.

At the core of these property market conditions lies the principle of supply and demand.

Sale home buyers have the upper hand when the supply of Sale homes surpasses the demand. Conversely, when demand outpaces supply, Sale house sellers hold the advantage. Recognising which property market you are in is crucial for making informed decisions, regardless of whether you are a buyer or a seller.

What Kind of Property Market is Sale in?

The best way anyone can judge the market is to analyse the percentage of properties marked as “Sold STC” (Sold Subject to Contract) and “Under Offer” in relation to the total stock of properties on the market.

E.g. if there are 500 properties on the market (both available and sold stc/under offer) and 200 are sold stc/under offer … 200 as a percentage of 500 is 40%.

Everyone can do this by searching the property portals (e.g. Rightmove, Zoopla and OnTheMarket) by searching for Sale and calculating it by asking for the results with sold stc/under offer and without sold stc/under offer.

The designated property market states are as follows:

  • 0% to 20%: Extreme Buyers’ Market
  • 21% to 29%: Buyers’ Market
  • 30% to 40%: Balanced Market
  • 41% to 49%: Sellers’ Market
  • 50% to 59%: Hot Sellers’ Market
  • 60%+: Extreme Sellers’ Market

This methodology is widely used by many professional property traders, corporate asset managers and developer part exchange providers to quickly assess the temperature of any local market. It offers a reliable and efficient measurement of market heat, enabling informed individuals to select the right strategies and stay ahead of the market to achieve superior results.

The statistics have been sourced from website ‘The Advisory’, which have calculated the market state stats for many years. I wanted to share them back to the summer of 2018, so you can see for yourself.

What are the Statistics for Sale for the Last 5 Years?

 Jun-18Jun-19Jun-20Jun-21Jun-22Dec-22Mar-23May-23Jun-23
M3362%56%50%79%82%68%63%68%67%

You can quite clearly see Sale went into an extreme sellers’ market during 2021 and 2022 and is still at levels higher than pre pandemic.

Now of course this could all change, so let me explain both extremes for either market.

Tips for Sale Home Sellers in a Buyers’ Market

Selling a Sale property in a buyers’ market can be daunting, but you can improve your chances of success with the right approach. Here are some valuable tips for Sale home sellers:

  1. Be realistic with your asking price: If the Sale property market becomes a buyers’ market, home sellers will need to understand the challenging market conditions and set a competitive price from the beginning. Overpricing will deter potential Sale buyers from even viewing and lead to your home being on the market for months. People will start to think there will be something wrong with your home and dismiss it even more.
  2. Present your Sale home at its best: In a competitive buyers’ market, making your property stand out is vital. Consider staging your home and completing any necessary repairs to make it more appealing to home buyers.
  3. Maximise your exposure: Effective marketing is crucial, particularly in a buyers’ market. Collaborate closely with a reputable local Sale agent with extensive area knowledge and a strong marketing team to ensure maximum visibility for your property. Gone are the days of just putting the property on Rightmove and hoping.
  4. Be prepared to negotiate on more than the pound notes: Price is not the only factor in negotiations. Buyers may also be open to discussing terms and conditions like what you are leaving regarding fixtures and fittings, so be flexible and willing to find common ground.

Tips for Buyers in a Sale Seller’s Market

If you find yourself navigating a sellers’ market as a Sale buyer, these tips will help you improve your chances of securing the right property:

  1. Define your necessities: Clearly understand your property needs and prioritise them. Be prepared to compromise on certain aspects to increase your chances of finding a suitable property.
  2. Be friendly: Build a positive rapport and relationship with the home sellers on the viewing. This can really work in your favour. First impressions can make a difference.
  3. Act quickly: In a seller’s market, hesitation can lead to missed opportunities. If you come across a Sale property that meets your criteria, schedule a viewing promptly and be prepared to make an offer if it resonates with you.
  4. Make fair offers: While everyone wants a great deal, offering a reasonable price shows respect to sellers and increases the likelihood of your offer being considered. Silly low offers are often dismissed in competitive markets and can sometimes offend.
  5. Practice patience: Although speed is essential, exercising patience is equally vital. Rushing into a decision can result in regret. The right property will come along, so balancing acting swiftly and making informed choices is critical.

Understanding the dynamics of buyers’ and sellers’ markets is essential for both buyers and sellers in the Sale property market.

By grasping the nuances of each market condition and applying the appropriate strategies, you can maximise your chances of achieving your Sale property goals. Whether you find yourself in a buyer’s market, seller’s market, or a balanced market, adapting your approach and working closely with an experienced local agent will significantly enhance your chances of success in the ever-changing world of real estate.

But let me leave you with this one last thought. Regardless of whether it’s a buyer’s or seller’s market, it’s important to recognise the interconnected nature of these market conditions.

A significant statistic to consider is that 81% of sellers are also buyers.

This means that as you gain an advantage as a seller in a hot market, you may face challenges when transitioning to the buyer’s side.

Conversely, in a buyers’ market where you have the upper hand as a buyer, you might encounter difficulties when selling your own property.

It’s crucial to understand this dynamic and plan accordingly, as the dynamics of the Sale property market are often a delicate balance between gaining and losing, and this holds true for both buyers and sellers.

These are my thoughts, do share yours in the comments or by reply.

Posted on

Sale Property Market Holding up Despite Doom and Gloom in the Newspapers

The Sale housing market over the last three months is now becoming more ‘normal’ after the last couple of years of insane demand when the lockdowns started a race for space!

Even with the blackening economic doom-mongers forecasting a harsh slowdown in the British property market, the number of people buying and selling their homes is still very good for the time of year.

Whilst many homeowners are reducing their asking prices, it is not the 20% (some even said 30%) drop some property commentators and newspaper journalists had predicted.

Looking at the stats for Sale for the last three months since the disastrous Truss mini budget – they make good reading.

Of the 400 Sale properties that have sold (stc) between late September and the start of January, the average length of time it took to achieve a sale was 33 days.

Interesting when you split it down by price, in Sale:

  • Under £100k – 112 days
  • £100k to £200k – 57 days
  • £200k to £300k – 37 days
  • £300k to £400k – 27 days
  • £400k to £500k – 25 days
  • £500k to £1m – 26 days
  • £1m and above – 29 days

And by type:

  • Sale Apartment/Flat – 56 days
  • Sale Terraced/Townhouse – 28 days
  • Sale Semi-Detached – 26 days
  • Sale Detached – 27 days

The latest sold price data from the Land Registry shows that Sale house prices currently remain 12% higher than they were 12 months ago; the rate of growth has dropped significantly.

Sale house prices only rose by 0.9% in December; thus we are seeing the first sign that the property market is starting to cool.

With interest rates now at 4% and further increases likely, that will undoubtedly spur ongoing cooling in Sale property values yet it’s doubtful we will see the Sale property market go into the deep freeze that many doom-mongers were predicting.

As I said in recent articles on the Sale property market, we will see a 5% to 10% reduction in Sale house prices over the next 12 to 18 months.

That will only take us back to the prices achieved in mid/late 2021 or early 2022 (depending on the property type).

Landlords have experienced double-digit rent growth in the last 12/18 months with a shortage of rental properties coming onto the market. I cannot see this changing in the short term, so I expect rents to be a further 10% higher by Christmas 2023.

Last week I stated it is not always wise to only focus on house prices but also take reference from the number of property transactions completed that feeds the fire of the British property market.

For example, in March 2021, 135,670 properties sold, yet a month later, it dropped to 87,600. A couple of months later, it rose again in June 2021 to 165,290 homes sold (for it to drop to 64,000 in July).

Whilst this is good news for estate agents and removals companies, it can skew the property market and put undue pressure on the property market (pressure which could cause a housing crash if not put under check).

Like most things, slow, steady and consistent is the preferred option for the property market. Throughout 2022, the number of properties selling in the UK had been a steady average of 68,832 per month, ranging from a low of 61,800 in January 2022 to 72,200 in July 2022.

This consistency will continue into 2023 and a return to a more

‘normal’ housing market.

One final thing I have noticed about the Sale property market in the last six months is the number of larger properties coming onto the market that last sold over 25 years ago.

Homeowners in their 20s, 30s and early 40s tend to move every five or six years, yet when they reach their late 40s and 50s, they tend to stay put for longer. These properties only tend to come on the market when people pass away or must be sold for nursing home fees etc.

These mature homeowners are downsizing for several reasons. Their children have flown the nest and they are rattling around in homes with accommodation they don’t need. Many are being driven to sell their large homes in light of mounting energy bills, high inflation and never-ending maintenance costs that larger properties demand.

The second reason is that the recent rises in Sale house prices has meant the money released to downsize has grown, meaning if these mature homeowners sell up and cash in to more manageable properties, the amount of money released is quite impressive.

In conclusion, 2023 is going to be a more ‘normal’ year, akin to the 2016 to 2019 years. Sale homeowners need to be realistic with their pricing, yet as over eight out of ten sellers buy another home, the one you buy will be lower.

If you are considering selling your Sale home in 2023 and would like a chat about your options, feel free to drop me a line or call the office.

Posted on

House Prices Ought to be Falling – these are the reasons they are not.

Looking at the newspapers with their doom and gloom headlines, you would think that the Sale property market (and the British property market) would be on its knees.

Lets have a look at Sale as an example.

Ring some Sale estate agents for a viewing or free valuation, and if you can get an appointment within a week to ten days, you are doing well!

British properties continue to sell in good numbers.

In July and August 2022, sales have been agreed on an average of 25,476 UK properties per week.

Interesting when compared to the averages of 27,351 sales agreed per week in 2021 and 26,382 sales agreed per week, year to date in 2022.

So why is the Sale property market defying all expectations?

It is because there is an absolute shortage of properties to buy on the books of Sale estate agents, meaning Sale house prices are being kept buoyant (as demand exceeds supply).

Today, there are 356 properties available to buy in Sale. Roll the clock back to October 2007, the month before the last house price crash, and it was 1,918.

That’s 81% fewer properties to buy today in Sale than the month before the property crash.

Notwithstanding suggestions that the Bank of England’s higher interest rates would peter out British house price growth, the continued limited supply of properties coming onto the market has helped Sale house prices climb.

Sale house prices are 13.2% higher today than a year ago.

Nevertheless, there is evidence that the insane demand for property has started to ease, and supply is increasing, which means that the direction of the Sale housing market will begin to change in the coming months.

This can be seen in several ways.

Back in January and February (2022), 8,094 UK properties per week were reducing their asking prices, whilst this July and August that had risen to an average of 13,115 UK properties per week. This is significant as some ‘optimistic’ homeowners who placed their properties on the market in the spring and early summer have had to reduce their ‘optimistic’ asking prices to attract buyers.

Also, the number of UK house sales falling through (i.e., when the sale is agreed yet the sale falls through before the legal paperwork is completed) is starting to creep upwards from an average of 5,558 properties a week in the spring of 2022 to 6,854 per week in July and August 2022.

Sale house prices have risen over recent times; the latest figures are based on what was selling in the late winter/early spring of this year and subsequently completing the sale in the early summer.

The prices obtained by the estate agents on properties achieving a sale in Sale today (i.e. in the autumn of 2022) are slightly lower than what was obtained nine months ago. This means the house statistics published in early spring 2023 will slightly reduce. Nothing to worry about – I want to give you a heads up and not to be concerned. The simple fact is …

we are returning to a more normal Sale housing market this autumn, compared to the crazy last 30 months since the end of lockdown one.

With UK inflation standing at 9.9%, this brings an interesting scenario for Sale property values.

Reducing ‘real’ wages will hit first-time buyers and existing homeowners’ disposable income, while the same high inflation will make the Bank of England increase interest rates.

These things will significantly reduce homebuyers’ capacity to afford their mortgages as the fewer people who can take out a mortgage; the fewer buyers will buy homes.

The Bank of England base rate currently stands at 1.75%, yet forecasts suggest it could end the year between 2.75% and 3%. Yet let us not forget the long-term average over the last 50 years has been between 7.1% and 7.2%, and many mature Sale homeowners will remember Bank of England Base Rates of 17% in 1979, so these sorts of increases are still off a low base.

During these autumn months though, the lack of properties on the market and available to buy still support Sale house prices. The newspapers compete for attention and use clickbait titles to generate more interest in the publications.

The simple fact is that unless something seismically happens in the world to change things materially, the Sale and British property markets will continue to harden slowly and will face some different challenges compared to the last 30 months, but fundamentally Sale house prices will remain broadly neutral over the next 12 to 18 months.

These are my thoughts; what are yours?

Posted on

Sale Tenants’ Spiralling Energy Bills are About to Become Sale Landlords’ Problem

As gas and electric bills rocket for Sale tenants, Sale landlords who do not start to make energy efficiency upgrades face lengthy void periods and will have to discount their rents. This is irrespective of the Government’s plans to change the rules on renting properties with low Energy Performance Certificate (EPC) ratings.

Until six months ago, out of the thousands of tenants I have shown around Sale properties in all my years as an agent, I can count the number of tenants who have requested to see the EPC of the rental property on the one hand. Now, it’s the first question tenants ask.

The better the EPC rating, the lower the gas and electric bills.

Sale tenants are leaving their poor EPC-rated properties which are too expensive to run and moving into higher-rated EPC rental properties.

The average heating bill for the 7,368 Sale tenants will rise from £86.10 per month to £223.86 per month.

And their hot water bill will rise by £34.15 per month and lighting by £21.58 per month.

Each Sale tenant will have to find an extra £193.49 per month for their gas and electric bills.

To give you an idea of the extent of the money being spent by Sale tenants on heating alone (ignoring hot water or lighting), last year it was £7,612,729.37, and by 2023, it will be  £19,793,096.37 a year.

Yet these stats don’t tell the whole story.

It is a legal requirement for every rented property to have an EPC which rates a property on its energy performance (like those washing machine or fridge ratings, albeit for a property). A is the best rating, and G is the worst.

Whilst the law states property cannot be rented with an EPC rating lower than an E in England and Wales, there are exceptions to this, meaning Sale rental properties are still being let legally with an F and G rating. Although legislation for a minimum E rating EPC requirement in Scotland was scheduled in 2020, it never passed through the Scottish Parliament because of the pandemic. 

Let me show you the average saving in energy bills between the EPC rating of an average Sale rental property.

  • A Sale rental property with a D rating will cost £38.50 more per month than a C-rated property
  • A Sale rental property with an E rating will cost £67.66 more per month than a D-rated property
  • A Sale rental property with an F rating will cost £97.16 more per month than an E-rated property

Both Westminster and Holyrood governments now propose introducing a minimum EPC of band C for all new tenancies from 2025 (and 2028 for existing tenancies).

Irrespective of this new potential legislation, those Sale landlords with low EPC ratings will now need to seriously consider making those energy efficiency upgrades to ensure their Sale rental properties continue to appeal to tenants.

I can see Sale rental property’s energy efficiency ratings filtering into rental prices over the winter months.

Sale rental properties with low EPC ratings will probably rent for between 4% to 10% less than higher energy proficient properties.

This means Sale landlords could have to accept between £48.00 and £120.00 per month less for an average Sale property with a low EPC rating compared to a high-rated EPC rental property.

Any Sale rental property with a lower EPC rating will also take longer to find a tenant, especially during the winter. This means some Sale landlords will have the prospect of void periods early next year.

I have seen more Sale rental properties coming onto the market in July and August, so if this trend continues, this will give Sale tenants much more choice. With the increased supply of rental properties, I certainly believe some tenants could decide to offer less on Sale rental properties with low EPC ratings.

So, what are the options?

I am experienced in reading EPC reports and am aware of the most cost-effective way to improve the EPC rating of your Sale rental property. Irrespective of whether you are a landlord client of my agency, another Sale lettings agency, or you even manage your property yourself – feel free to drop me a message. I will find your EPC on my database and give you 5/10 minutes of my time, over the phone, at no charge, to guide you on the best options. What do you have to lose?

Posted on

Why Aren’t Liz and Rishi Courting Lymm’s Generation Rent?

With the cost-of-living crisis beginning to hit, the 20 and 30-somethings of Lymm urgently need the help and support of the Government to help them get on the property ladder.

For the last few weeks, we have listened to the debates and hustings of Liz and Rishi. Between them, they have told us how they are going to stop building on the green belt, slash taxes, outbid each other on the number of refugees they are going to deport and push back against WOKE culture wars, but what are they doing for the 20 to 30-somethings of Lymm?

Dubbed ‘Generation Rent’ by the press, desperate to get on the property ladder, this is an open goal for any candidate to obtain more votes to become the next Prime Minister.

Yet only 16% of the c.200,000 Tory membership is aged 18 to 34

whilst 47% of members are aged between 55 and 74.

Therefore, it’s not a surprise that neither Liz nor Rishi aren’t speaking daily about the cost of petrol for the daily commute, rising childcare fees or the lack of opportunities for first-time buyers to purchase their own properties.

(For balance, 16% of Labour’s members are 18 to 34, 20% for the Lib Dems and 16% for the SNP).

Everyone is feeling the effect on their household budgets with the rise in energy bills. Yet, it is the younger generation (i.e., Generation Rent) that are having to cope with the frenzy of rising energy costs the most.

Whilst increasing energy prices will affect all households across the country, younger (and less affluent) households are more prone to be disproportionately affected than those on the lowest incomes (i.e., Generation Rent).

In the financial year ending in 2020, the least well off 25% of households spent 5.59% on energy compared to 3.9% for the average UK household. With 2023 energy bills set to be triple those figures, energy bills for those in the lower quartile will rise to around 16.8% of their household budget.

And let’s look at the housing element of the ‘Generation Rent’ household budget.

The average rental of a Lymm property in the summer of 2020

was £1,147 PCM; by the summer of 2021, itwas £1,186 PCM,

and today, it is £1,296 PCM.

Overall, Lymm rents are 9.3% higher than a year ago and 13.1% higher than two years ago.

This is the fastest annual rate of rental growth since records began in 2006. This increase in rents isn’t standard. Before 2020, I would have expected to see this level of rent growth over a seven-to-ten-year period – not two years. Good news for Lymm landlords, yet not so for Lymm tenants.

Why have rents increased so much in Lymm?

It comes down to fewer rental properties and existing Lymm tenants not moving as much.

There are 41 fewer rental properties in Lymm than five years ago, leaving only 724 private rental properties in Lymm.

9 out of 10 rentals come onto the market because the existing tenant is moving. Yet, because there are fewer Lymm rental properties and the asking rents for those are much higher than their current home, many Lymm tenants are not moving, exasperating the issue even further.

Today, I looked on Rightmove, and there were only 11 properties available to rent. I would have expected that to be over double that pre-pandemic.

Neither candidate has been silent on the topic of homeownership for the young.

Rishi Sunak said he would stop building on the greenbelt. This, however, would not help Generation Rent massively.

Liz Truss has pledged to help more renters buy their first home by stating she will ensure tenant’s rental payments could be used as part of mortgage affordability assessments. This is important as the mortgage payments can be 10% to 20% lower than the rental payments.

 

Tied in with new relaxed mortgage affordability rules announced by the Bank of England in early August, this is undoubtedly a step in the right direction to help Generation Rent.

 

Truss also plans to scrap the red tape holding back housebuilding and give local populations more say on developments. However, when Boris Johnson suggested something similar a few years ago, the policy was quietly dropped after the Liberal Democrats used this against them resulting in the Tory’s resounding by-election defeat in 2021 in Chesham and Amersham. So, by the end of the first week of September, we will know who the Prime Minister will be. Whoever gets the job has a gigantic task on their hands. I wish them luck and ask them not to forget the younger generation and their aspiration to be homeowners.

Posted on

Lymm Starter Homes are 25.8% Cheaper Today Than in 1989

Even though the average value of a Lymm first-time buyer property has risen by 361.4% since 1989 to £355,430, the monthly payments Lymm first-time buyers must make on their mortgages as a proportion of their take-home pay is 25.8% less today compared to 1989.

Today, according to the Nationwide Building Society…

the average Lymm first-time buyer only needs to pay out 24.5% of their household take-home pay on their mortgage payments, compared to 33.0% in 1989 (i.e., just over a quarter less).

You might say 1989 was 33 years ago, a long time ago and not relevant to today. I would agree.

So next, I looked a little closer to home, and in 2007…

the average Lymm first-time buyer had to spend 37.9% of their household income on mortgage payments (i.e., 35.4% proportionally cheaper than today).

So why do I say all these things?

Last month, the Bank of England revealed that its Financial Policy Committee would be removing their mortgage market affordability test on people taking out mortgages in August.

The test was introduced in 2014 to ensure the UK didn’t have a repeat of the 2008 Credit Crunch and particularly hit first-time buyers with what they could afford to buy.

This rule change means Lymm property buyers could soon be able to borrow thousands of pounds more and purchase larger homes.

The decision to withdraw the affordability test certainly raised eyebrows in the press, primarily as the Bank of England has raised interest rates five times in the last six months to try and reduce rising inflation. Yet, as stated in the first part of this article, Lymm first-time buyers are comfortably paying their mortgages compared to previous years – therefore everything should be ok with this rule change.

The old rules tested home buyers on mortgage repayments if interest rates rose to 6%/7%, yet the Bank thought that rule was too harsh.

Not all rules have been changed, as the important Bank of England ‘loan to income ratio’ stays put.

The Bank were keen to stress that the mortgage market was not going to turn into a free-for-all, as it did in the mid-2000s when the likes of Northern Rock were offering 125% mortgages, and a sixth of all UK mortgages were given without proof of income.

I believe it will have a progressive effect on the Lymm property market.

Many Lymm tenants who have been paying rents far more than actual mortgage payments for the same Lymm home, but have failed affordability assessments regardless, will now be able to get on the property ladder.

The rule change should open the Lymm property market up a little more and allow house prices to grow in Lymm.

I advise anyone who has been refused a mortgage on affordability in the past to speak to a mortgage arranger. If you don’t know of one, drop a message to me, and I will give you details of mortgage arrangers you could talk to.

Posted on

71.9% of Sale Properties Were Bought With a Mortgage in the Last Ten Years

Could the high levels of mortgages that Sale people take out cause another property crash?

Many Sale homeowners and landlords have been contacting me recently and asking what will happen to the Sale (and the UK) property market? More specifically, will we have a repeat of the 2008/9 Credit Crunch property crash?

High mortgage payments were one of the critical catalysts to Sale house prices dropping by between 16% and 19% (depending on the type of property) in just over one year in Sale.

To answer that question, let me look at the mortgage numbers locally to see where we stand in the Sale area.

25,584 of the 35,572 property sales in the last decade in Trafford were made with a mortgage.

71.9% of our local authority area house purchases have been made with a mortgage (meaning 28.1% are made with 100% cash).

Interesting, when compared with the national average of 67.4% of house purchases with a mortgage over the last decade.

However, what is thought-provoking is the number of house purchasers buying with a mortgage has steadily been decreasing over the last decade.

Between 2012 and 2017, the percentage of people buying with a mortgage was 72.7%, yet over the last five years in Trafford, that has fallen to 71.6%.

The issue is that most people need a mortgage to buy their home.

However, it’s not the amount of mortgage that is the issue, more the level of monthly payments. So, if you fix your mortgage rate, then your payments are fixed (a good idea especially as interest rates are on the rise).

In the last quarter, just under nineteen out of twenty (94.35%) of new borrowers that took out a mortgage had a fixed-rate mortgage at an average interest rate of 1.84%.

That’s good news for recent buyers as most of their payments won’t rise even though Bank of England interest rates have risen over the last few months. Yet it’s essential to see what existing homeowners with mortgages have done with their mortgage rates (i.e. fixed or not) as they form the bulk of the property market.

This is because in 2008/9 (the last crash), many people were unable to afford their high monthly mortgage payments when they were made redundant because interest rates were much higher. This meant many Sale homeowners ‘dumped’ their houses onto the market, all in one go in 2008, because they couldn’t afford their high mortgage payments.

Also, the banks could not lend money for mortgages as easily because of the Credit Crunch, meaning fewer people could get a mortgage, so the demand for Sale houses dropped as well.

In a nutshell, the number of Sale properties on the market almost doubled overnight in 2008, yet demand plummeted as mortgages were hard to come by. High supply and low demand meant Sale house prices nosedived in 2008/9.

Going into the Credit Crunch, one in six (60.4%) homeowners with a mortgage had a fixed rate at an average of 5.76%. By 2013, this had dropped to one in three people (33.29%) having a fixed-rate mortgage at an average of 3.34%.

Yet today, just under 17 out of 20 homeowners with a mortgage have a fixed rate at an average of 1.97%.

Whilst the country might owe collectively £1,630.5 billion in mortgages, irrespective of increasing rates, most homeowners have protected themselves with a low fixed interest rate.

Also, the overall ratio of mortgage debt in the UK, compared to the value of the homes the mortgages are lent on, is also low compared to the year before the last property crash. This ratio is called the Loan to Value ratio (LTV). The higher the LTV, the less equity the homeowner has in the property.

In 2007 (the year before the crash), only 49.4% of people had a mortgage less than 75% of the house’s value (i.e. they had an LTV of less than 75%). Today that stands at 60.9%, which means more people have more equity in their property.

Another thought on why the country is in a better position is only 4.22% of mortgages have a 90% or higher LTV (compared to 16.28% just before the crash in 2007).

1 in 6 people were vulnerable to negative equity in the last property crash, whilst today that would only be 1 in 25.

This means if we do have another property market correction for any other reason … the number of people in negative equity will be much smaller, so it won’t affect the property market as much.

So, in conclusion, as we have fewer people with high LTV mortgages and fixed rates that are a third of what they were in the Credit Crunch, we are, as a country, in a better position to weather any storm.

If you would like any advice or opinion on the Sale property market, be it buying or selling or anything to do with investing in the Sale buy-to-let property market, don’t hesitate to drop me a line. 

Posted on

Why Are There So Few Homes on the Market in Sale?

  • 29% drop in the number of properties for sale in Sale in the last 12 months.
  • 521 Sale homes have sold (stc) in the last three months alone, taking the time from the ‘for sale board’ going up to sale agreed to a median of 15 days.
  • The £200k to £300k price range in Sale is the most active, where it only takes 14 days to agree a sale, but the £100k and under bracket is taking 35 days.
  • Yet what issues cause the people of Sale to want to move home and what can Sale people, who want to move in 2022, do to ensure they sell and find the home of their dreams?

There are 286 properties for sale today in Sale; roll the clock back exactly a year, and the figure was 405 – so there’s been a drop of 29%. This drop is being dubbed the ‘for sale board crunch’.

The ‘for sale board crunch’ has left many prospective Sale home buyers stressed trying to find the right Sale property as the number of properties available to buy has dropped significantly.

I am sure you know people looking for their next Sale home, but when they see it on the portals (Rightmove, Zoopla, Boomin, OnTheMarket etc.) the properties are gone within days.

With demand at an all-time high, many Sale home buyers are in a state of misery as Sale house prices have grown in the last few years, forcing many of them to review their plans.

They are victims of the ‘for sale board crunch’ in the Sale property market, the likes of which have not been seen since 2007.

Normally when there has been excess demand in the residential sales market, that frothiness has been taken care of by people moving into rented accommodation. However, the number of Sale properties available to rent is at a 15-year low.

So why is the Sale property market this way?

Demand for Sale homes has exceeded the number of properties for sale since the general election in December 2019. After years of long drawn out Brexit negotiations, homeowners and buyers were more confident about their move. Many Sale people who put their home move on hold in 2018/19 had more confidence to return to the market.

The first lockdown in the spring of 2020 did nothing to quell this pent-up urge, and since the late spring of 2020, the Sale property market has been on fire! The lockdown changed what homeowners were looking for in their Sale home. Proximity to public transport dropped down the wish list for buyers, and demand for apartments dropped. Whilst properties with larger gardens and rooms that could double up as home offices tended to be at the top of most Sale buyers’ wish lists.

Around 36% more Sale properties have sold in the last 18 months than the long-term 20-year average.

Looking at the supply side of the equation, in the last five years, an average of 204,410 new homes per year have been added to the number of properties available in the UK. Also, 239,600 properties came back into the market when they became available after their owners had sadly passed away. Yet still, that isn’t enough. The country needs at least 300,000 new dwellings to keep pace with demand.

There is also another problem that has come to light with the cladding issue of apartments. Just over three-quarters of a million apartments have issues with cladding. Whilst these are being sorted out (which will take many years), they are essentially unsaleable unless a fire safety expert on these buildings signs them as safe.

These cladding issues prevent these apartments from coming onto the market (thus reducing the supply of properties to buy). It also precludes their owners from moving up the property ladder from their apartment to a house. Also, many first-time buyers who can save a bigger deposit or be gifted cash from the Bank of Mum and Dad are skipping the apartment as their first home and going straight for a house, thus intensifying the lack of larger properties for sale.

So, how long does it take to sell a Sale property now?

Sale Apartments – 28 days

Sale Terraced / Town House – 14 days

Sale Semi-Detached – 14 days

Sale Detached – 22 days

This means it is a seller’s market in Sale, empowering them to push up their asking prices in high demand areas. However, most sellers are also buyers, which means the advantage they have on selling their property is turned on its head when they come to buy.

Many Sale sellers prefer to find their future Sale home before putting their current home on the market. That is making the lack of properties on the market seem even harsher than it may otherwise be.  

The ‘for sale board crunch’ would be somewhat eased if Sale sellers put their property onto the market whilst they were hunting for their next ‘forever home’.

However, not all Sale homeowners are doing so, partially because they (wrongly) believe they will be made homeless if they find a buyer and can’t find another property to buy (remember, you are not legally committed to moving until exchange of contracts).

A big issue will be finding a suitable Sale home. We very much have a chicken and egg scenario. Some homeowners are waiting for the right property to become available before they put their home on the market. This will probably mean that the Sale property will sell even before the photographs have been taken of your home.  

Yet, many Sale homeowners are worried if they put their house on the market and it sells, they won’t be able to find another suitable home and thus be homeless.

Classic chicken and egg – so what do you do first?

There is another way of doing this. It’s a technique estate agents used to use before the internet, and it’s called ‘chain building’. Many Sale homeowners are contacting me to move home yet don’t want to be made homeless. What we do is slowly build a group of people in a chain over many months. It requires a lot of patience to build a chain downwards and upwards around you.  

There is no cost to this and no legal commitment to go through. It can take six, even twelve months to build a chain of people who are prepared to wait for the chain to form.

Yet, everyone normally gets their next ‘forever home’ by playing this long game.

Because if you don’t play the long game, build relationships with Sale Estate Agents (who can build these chains) and only rely on waiting for properties to appear on Rightmove, Boomin, OnTheMarket or Zoopla, you will be sorely disappointed.

According to national research from Denton House Research, 7 out of 8 people who viewed a house through an estate agent in 2021 were not on the mailing list of that agent before they viewed it.

That means all these Sale properties built on a chain builder (as above) will sell, yet won’t appear on Rightmove or Zoopla, meaning you will miss out. 

You must get yourself on the mailing list of our estate agency (and other agents if they do this chain building) so you don’t miss out on your next forever home in Sale. 

If you would like a chat about anything mentioned in this article, feel free to drop me a message or call me.