The annual house selling cycle
August 28, 2019
It is very difficult to get away from all the drama surrounding the current UK political landscape and Brexit. The lack of clarity and certainty is most definitely having an impact on the investment property sector with some landlords deciding to sit tight in the hope that things will improve and others choosing to sell as fast as possible.
In a similar fashion, on the buy-side we see investors holding-off in the expectation that prices will soften whilst others are taking the opportunity to buy now believing we are near the bottom of the curve or if they come across a deal where the price is right.
After July and August, which are generally quiet months, because of the holiday season, the property market typically starts to become move active again in September and October. However, with 31 October being the date for the UK leaving the EU and a possible vote of no confidence before then (and maybe a general election – who knows!?!) this year is likely to be a bit different!
TheAdvisory have created an excellent graph to show how offers typically relate to asking prices throughout the annual property cycle in a normal upward market. However, it’s worth stating the obvious – that the type of property for sale, its location and desirability are key factors that drive prices on a case-by-case basis, and we’re not in a normal market currently! That said, the general principles of a slower summer and winter periods are obvious for all to see:
Bucking the trend, at Vesta we’ve seen record offers with the month of July alone totalling over £25 million and August to date is over £18 million! This highlights that there are certainly investors in the market looking to place money into the right investment property opportunities.
Unsurprisingly, given the state of the market, whilst there have been some speculative offers the vast majority of offers we’ve received have been focused on the more competitively priced properties on the Vesta platform.
To highlight the impact of listing at the right price, a property in Nottinghamshire had almost no interest with zero viewings in its first month after listing, even after extensive exposure across Vesta, Rightmove, Zoopla and social media. However, following a discussion with the vendor and a re-evaluation on the price, after only a 5% price reduction the subsequent month resulted in many more enquiries, several viewings, and a great offer. It is now SOLD STC (much to the vendors and our delight)! Plus all the time that the property was on the market the landlord continued to earn rental income, didn’t have to incur council tax or other running costs (which they would have had it been void) and ensured the tenant got to stay in their home! So win-win!
We have many more examples like this, and as a marketplace, our role is to help both buyers and sellers find the right price and preserve rental income.
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