Should I sell my house now?
Traditionally, the return from the summer holidays and back to school coincides with people putting their homes on the market, hoping to sell before Christmas. But with a global pandemic and a UK recession, is this really the time to be moving house?
September 10, 2020
In some instances, the decision to sell is made for you. For example, if you need to move after a divorce, pay off debts, or move because of work or family commitments.
But what if you’re keen to move area post lockdown, on the hunt for a home office and a garden? Or have reached a point where you need to downsize or step-up. Should you take the plunge now or wait? Let’s look at the arguments.
When the housing market re-opened after lockdown, the government called on all parties to “be prepared to delay moves, for example if someone becomes ill with coronavirus during the moving process or has to self-isolate.”
It also warned “It may also become necessary to pause all home moves for a short period of time to manage the spread of the coronavirus”.
But over the past few months, the industry has established a new normal. Professionals from surveyors to estate agents have responded by adapting what they do to minimise risks and keep the market moving.
When it comes to exchanging contracts, a “Covid Clause” has been devised which offers parties the ability to exchange contracts while ensuring they are not at fault and in breach of contract, with all of the associated costs, if they are unable to complete because of a defined ‘Coronavirus Event’ e.g. new government restrictions or a mortgage product being pulled.
So while moving during coronavirus could still be subject to delays, moves are happening. Residential housing transactions rose significantly in July to 70,170 according to HMRC data. This is a 14.5 per cent rise on June but 27.4 per cent down on July 2019’s number.
With the economy shrinking during lockdown, it didn’t take long for a formal recession to be announced, with accompanying announcements of business closures and job losses.
Because recessions lead to job and income losses, there are consequently less people looking to invest in something as expensive as a new home, meaning house prices generally fall during a recession.
But this isn’t yet the case. In fact, confidence amongst homebuyers appears high. Which brings us to the reasons you might want to sell your house now…
A mini-boom in activity
The lifting of house moving restrictions and people re-prioritising what they want from their homes, has led to the market experiencing a mini-boom.
Stamp duty cuts alongside an increased demand for certain homes post-lockdown, has driven confidence in the housing market to a four-year high.
Annual house price growth stood at 5.2 per cent at the end of August. Recent figures from Halifax are also showing house prices increasing, by 1.6 per cent from July to August.
And monthly mortgage approvals data from the Bank of England shows lenders approved 66,300 mortgage applications for home purchase in July, up from 39,900 in June. The figure is seven times higher than the trough of 9,300 in May.
A good time for sellers
With demand outstripping a modest supply of housing, the vast majority of newly listed homes for sale are being snapped up. This puts sellers in a strong position to negotiate and pick from the best buyers who are able to move quickly.
And things appear to be moving fast. Rightmove last week reported that more sellers are finding a buyer within a week of putting their home up for sale than at any time in the past ten years.
The time-limited stamp duty holiday is encouraging people to take the step and list their property and/or look for a new one. What is less clear is what will happen in the future. Pent up demand, a desire to move out of the cities post-lockdown and a time-limited stamp duty cut are fuelling demand at the moment. So if you’ve got your mind set on selling, it may be best to do so sooner rather than later.