In recent months, in certain parts of the country, the British property market has exhibited signs of cooling.
As a result, homeowners selling their homes
face increasing competition from more homes on the market.
The increase in mortgage rates has played a
pivotal role in this cooling, taking a toll on potential buyers' incomes,
thereby lowering affordability and demand.
The consequence? Some previously buoyant
regions, especially in the South, have experienced price corrections.
As the market faces this colder front,
local factors like the availability of reputed schools, amenities, and public
services remain paramount for those looking to buy.
The Overpricing
Trap
In a tougher property market, a common
strategy by some agents is to suggest you put your property on the market at an
inflated price, only to encourage the homeowner to drop it months later.
Large estate agencies have the resources to
allow many listed homes to remain unsold, whereas smaller agencies rely heavily
on consistent sales. Hence, the latter often propose more realistic prices to
ensure they get the house sold.
I have encountered countless Medway
homeowners being advised to list their property at an elevated price despite their
reservations. Over time, with sparse viewings and no genuine offers, they drop
the asking price. The original overestimation meant a prolonged waiting period
and they lost homes they wanted to buy. People like to think they are
level-headed and wise to such tricks.
So why does this happen? Remember, greed
can take over when an estate agent says they can get you an extra £30k than
another agent. That is why estate agents do it.
Of course, it's tempting to price your Medway
home ambitiously. While testing the waters with a slightly higher price tag is
understandable (we do it often at our agency), refusing to adjust the asking
price after the first few weeks if there is no substantial interest could be a
costly mistake.
An overpriced home can stagnate on the
market, leading potential buyers to assume there's something wrong with it. The
longer it sits unsold, the more it becomes stigmatised.
A lack of early interest regarding viewings
should be a clear signal; if there are no serious inquiries and/or offers
within the first few weeks, it's imperative to reconsider the asking price. By
being responsive and proactive, Medway homeowners can avoid the pitfalls of a
stale listing and increase their chances of a successful sale and move.
So why is it so much of an issue now?
81.1% More Medway
Homes are on the Market Today than 20 Months Ago
2021 was an exceptional year for people
moving home. There were more buyers than sellers, meaning the number of
properties on the market in Medway was reduced. Looking at the numbers…
The number of properties on the market on
1st January 2021 in the Medway area (ME1 to ME5/7/8) was 2,184, but by 31st
December 2021, that had reduced to 1,357.
By the 31st December 2022, that
had increased to 2,106 homes for sale, a rise of 55.2% in only 12 months.
It has continued to rise and today stands
at 2,458 properties for sale, a rise of 81.1% in 20 months.
With the average number of sales per month
in the Medway area 20.3% lower per month in 2023 than in 2021, with greater
supply (81.1% more properties for sale) and that slightly lower demand (i.e.
sales down 20.3%) … getting your asking price right is vital.
Determining the
Right Price
Buyers and sellers can arm themselves with
information about the Medway property market. Many online platforms provide
data about sold property prices in specific areas, giving Medway homeowners a
benchmark. Additionally, the time properties spend on the market can provide
insights into an agent's efficiency (again the portals like Rightmove and
Zoopla show you this).
When selling, obtaining valuations from
multiple agents and critically analysing them is vital. It's crucial to ensure
that agents provide evidence to back their valuations, enabling homeowners to
make informed decisions.
Rethinking the
Selling Strategy
The Medway property market tends to shift
collectively, much like boats carried by the same tide. Things are okay if
you're not faced with financial losses and can manage an upgrade. Many assume
continuous gains are certain when selling your home, but the real profit
materialises only when you part with your final property. You may not even
realise this profit directly, but it could be used later for elderly care
expenses or as a legacy for your family.
Once a property is listed, attention to its
online journey is essential. The initial four weeks provide insights into
whether your Medway property is priced correctly, gauged by the number of web
views on the portals, actual viewings of your property and offers received.
Yet, deciding to reduce the listing price
is more than just about attracting buyers; personal timelines and goals play a
significant role. For instance, one might ponder: Is there a deadline by when
the property must be sold? Can waiting a few months make a difference? These
considerations help in making informed decisions on price adjustments.
However, it's beneficial to consider
independent or boutique agents, like our agency in Medway, in a challenging
market. They often tend to offer a more authentic experience and realistic
valuations.
Finally, one strategy employed by some savvy
Medway home sellers is to list their property at a slightly lower price to spark
more interest and drive up offers.
Switching
Agents or Going Online?
With a slow property market, one’s patience
can wear thin. If you are considering switching agents, sellers should evaluate
the current agent's efforts and communication frequency. Another option is
multi-agency agreements. However, this approach has recently declined due to
associated higher fees.
With their fixed fees and remote
operations, online agencies seem like an attractive option. Yet, their
one-size-fits-all model can fail to capture the nuances of individual
properties, making them less effective in slower property markets.
Renting as an
Alternative
Renting out unsold properties is gaining
traction where rent is rising. However, prospective landlords should tread
carefully, considering growing mortgage interests, tax restrictions, and
tenant-related challenges. Again, if that is a potential option for you, do
give our agency a call.
Final Thoughts
The current Medway property market is
complex. The recent freeze by the Bank of England base rates is a welcome
pause. It won’t turn the Medway property market into a frenzy like the stamp
duty holiday did in mid-2020, yet it is a welcome respite.
With the right strategies and awareness, Medway
home sellers can effectively navigate these waters, ensuring their property
finds the right buyer at the right price.
If you are a Medway property owner, and
this article has sparked any questions, do not hesitate to give the office a
call.
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