Should I sell my house now? Well that’s a question many people are asking themselves and we’re going dive into it right now.
I put out weekly videos on my YouTube channel talking about all things London property related and why it’s so great to live in this fabulous capital city.
Today the question is “Why should I sell my home now?” or “Should I sell my home right now?” It’s something that many people are thinking about especially as Brexit continues to loom, and a lot of people are saying it’s not a great time to sell their home and you know what, on an absolute basis, you’re right, it’s not a great time to sell.
Why? Because it’s a buyer’s market and what does that mean? It means that there are fewer buyers out there and they have a lot of choice relative to the amount of stock that’s out there. It means that transaction volumes are down considerably in London and throughout the UK as the market continues to struggle with the Brexit uncertainty. It also means that a lot of sellers are kind of looking and saying: if I’m not going to be selling at the top of the market I might as well not sell right now – and that’s actually a smart decision if you have no reason to sell outside of you’re just trying to take advantage of the top of the market and we know that historically some areas of London housing prices have actually been doubling every 10 years, so for many sellers, it was really just a question of “it’s the top of the market I want to get out and move on”. So, coming back to the question “should I sell my house now?” then the answer is really – well it depends.
What does it depend on? Well, the most important thing it depends on is what is your personal situation and why are you selling? It’s a great time to sell if it means selling allows you to do something else.
We know at the end of the day we’re talking about property and homes so, say you’re a seller that’s been in the home for many years, perhaps you’ve raised your family there, maybe it’s time to sell just because it’s too much home anymore and you’re now looking to downsize and selling your home will allow you to move onto the next phase of your life.
Conversely, it might be the right time to sell if you’re looking to buy a bigger home, and perhaps you’re raising small children or looking to grow your family and you’re looking to buy a bigger property, it’s a fantastic time to sell. Why? Because even if property prices have come down at your price point, which might be a lower price point, if you’re trading up to a higher price value, housing prices have come down even more at the top end of the market therefore, if you’re looking to bridge and move up into the higher value transaction or a higher value home, it definitely makes sense to sell now.
Also, coming back to Brexit, while Brexit has created a lot of uncertainty and which means that again people are kind of sitting on the fence and that’s one of the things we know most when we talk about the fundamentals of the market, it’s that the market doesn’t like uncertainty and nothing has created more uncertainty than Brexit and we’re three years into it, which has been a long time for people to not really know what’s happening. We do know that some large corporates such as Apple have still committed huge headquarters in London and they take a long-term view of the London landscape which they’ve committed to being part of.
I often advise buyers and sellers to take a long term view because I believe the fundamentals of real estate in London is still sound because it’s driven by being in a place that people will still want to live and we know that there’s a chronic housing shortage so we believe that this will be absorbed over time and people will still want to live and work in London because it’s a great global capital city. So as far as the Brexit uncertainty though we know that the current date to leave the EU is the 31st of October but what if it doesn’t happen? What if Brexit doesn’t
happen by that date? And what if it does? What if in the worst-case scenario, we crash out? What I believe is that that will continue to create more uncertainty, which means the property prices could go down even more with fewer buyers wanting to buy and commit so again if we’re sitting here now in the summer and you’re thinking about selling then you need to be forecasting what you think is going to happen not just in the next six months but perhaps if you don’t sell in the next few months are you prepared to hold that property for a lot longer because perhaps the market gets even worse?
So the question: is what do you think is going to happen and really think about that worst-case scenario such that if we crash out or if there continues to be unsettled trade deals and things like that that need to be worked through which will happen in the scenario where we crash out all of that will take a long time to work through the market and really create a level of stability, so in ways you have to consider what you think is going to happen not just in the next three to six months but perhaps for the next twelve to twenty four months right? Because if you don’t sell soon are you prepared to hold that home for a lot longer and let all of that uncertainty work itself out through the market and the markets start to see a rebound?
One of the things we often say in real estate is you never know it’s the bottom until it’s on the way back up, so it’s really hard to time the market but you really have to come back to you why are you looking to sell?
One of the other reasons to consider selling is how long have you owned the home? Perhaps, even though we know that the last few years property prices in London have come down, particularly in prime central London, if you owned your home a lot longer you might still have a lot of upside appreciation and therefore you might look to be cashing out as you approach retirement and considering other things to use your money for so therefore there’s still plenty of equity and appreciation in your home.
The other reason to consider selling is if you own a buy to let property that you’ve held for a while. We know that over the last several years the government has instituted quite a few tax and legal changes that have made it a lot more expensive and onerous for private landlords to own property, therefore perhaps just in a pure return basis or even an aggravation basis it might not be worth holding that buy-to-let property
anymore and the rental yields you’ve been getting historically haven’t made it worth your while and you might not be seeing long term appreciation over time, so again, that might be a great reason to think about selling now versus holding it any longer and spending money paying accountants on tax returns and not just seeing the overall tax benefits that you used to see in the past.
Coming back to one of the other reasons to consider selling is, on a personal basis, is homes are where people live and sometimes people move for a variety of reasons whether it’s the fact that they’re relocating to a different part of the country, perhaps they’re taking advantage of being able to actually move closer in and change their lifestyle situation we know that there are pockets and areas of central London that are just really taking off now places like Paddington, and Kings Cross, and Elephant and Castle, which are creating so much more housing options and lifestyle change options that give people a real reason to perhaps come a bit closer in and might mean selling where you’re at.
Another reason to consider selling right now is that interest rates are historically low and it means buyers can afford a lot more house than they can otherwise and if interest rates start ticking up it might mean buyers are unable to afford more house and therefore you’ll see fewer buyers in the market and therefore again the dynamics is selling competing with that other stock that’s out there gets even worse so given the interest rates are historically low it’s a fabulous time for buyers to think about buying therefore, for you as a seller, it’s a great time to sell.
I hope I’ve given you a few things to think about when you’re asking the question of is it time to sell or should I sell my home and the answer, while it depends, we’ve summarised quite a few things to think about – whether it’s your personal situation; trading up or trading down; you’re a buy-to-let investor and you’re thinking about cashing out now because of the recent tax changes and compliance changes; or other hosts of personal situations that you should factor in when you’re thinking about selling.
If you want to know more, or you just want to find out what your home is worth so you can make your educated decision about selling, then please get in touch, and if you’ve got any other questions don’t hesitate to get in touch.