Homeowners looking to sell up have an even bigger concern than the current fall in house prices, an expert has warned.
Chris Hodgkinson, managing director of House Buyer Bureau, told Express.co.uk: “For those considering selling up at the moment, a hit on house prices isn’t the key concern, it’s finding a genuine buyer who will allow them to make their move that is the real difficulty.”
Figures from Nationwide indicate house prices fell 3.8 percent for the year to July, the biggest fall since 2009, but Mr Hodgkinson said there are more significant issues for the housing market.
He explained: “The biggest issue facing the market at present isn’t the marginal decline in property values but the uncertainty caused by higher interest rates.
“Buyers are sitting tight and those who are entering the fray are finding that the goal posts have moved with respect to their purchasing power between the time they’ve had a mortgage agreed and the time they make an offer.
READ MORE Mortgage warning as borrowers could miss out on extra £42,000
”This is leading to a far higher level of instability and longer transaction times, both of which are key ingredients that make a transaction more likely to fall through.”
Jackie Fitzgerald, CEO and Founder of Homes or Houses Ltd., warned the housing market is experiencing “analysis paralysis” as there is a lack of clarity about what will happen in the short term.
He said: “Sellers should be realistic. There are more sellers than buyers – do the research and work out what price you ‘must’ achieve and what price ‘would be great to achieve’ and start from there.
“Be patient, there is some way to go yet in this market before the future is clearer.. prices are not going up generally is the only real certainty.”
Premium Bonds holders made millionaires after less than a year with NS&I[PREMIUM BONDS]
PIP review process changes this month[BENEFITS]
How bad mortgage crisis could get – from negative equity to being made homeless[HOUSE PRICES]
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Figures from Twenty7tec show there were 1,507,421 total mortgage searches in July compared to 1,747,277 in June, with a 13.73 percent drop in all mortgage searches while product availability increased.
Twenty7tec director Nathan Reilly said: “In July we saw a substantial drop in mortgage searches, which could have been impacted by the sharp decline in house prices.
“However, lenders are trying to encourage buyers by making more products available and accessible, which can be seen in the 13.78 percent rise in product availability.
“Ultimately, this could be a positive outcome for first-time buyers who want to take advantage of the lower house prices, but if people have put their plans on hold due to house prices dropping there may be less availability in homes which will have a knock-on effect on mortgage searches.
“Usually the weeks on either side of a Bank of England rate rise are a busy time for the market, so it will be interesting to see the impact the Nationwide figures have following this week’s interest rate hike and sellers.”
Joshua Findlater, Managing Director of Landlord Vision, spoke about the potential risk of negative equity as house prices fall.
He said: “In a scenario where prices drop significantly, some homeowners could indeed find themselves in negative equity. However, it’s crucial to remember that this would not affect everyone uniformly.
“Factors such as the initial loan amount, down payment, and local market conditions would all play a role.”
He also warned the possibility of home repossessions also looms as a concern “during severe economic downturns”.
But he also said: “It’s worth mentioning that housing market dynamics differ across countries due to varying regulations and lending practices.
“While some regions may see an increase in repossessions during a crisis, it is not necessarily a foregone conclusion that the same scale of events would occur as in the US in 2008.
“Government intervention and support programs can also play a role in mitigating the impact on homeowners.”
Mr Findlater urged those selling up to stay informed about local market conditions and recent sales in their area.
He added: “Pricing your property competitively based on similar properties can attract potential buyers. I recommend investing in small improvements or staging that can enhance the appeal of your home, potentially fetching a higher price.
“Engaging a reputable real estate agent who knows the market well can also be beneficial, as they can guide you through the process and negotiate on your behalf.”
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
Source: Read Full Article