As we approach the end of 2021, the competitive market continues to ride the wave. Despite decreasing, demand is still higher than a year ago. To now, in 2021, sales volumes are 16% higher than the 5-year average (Zoopla).
Despite growing inflation and the likelihood of interest rate hikes, the Office for Budget Responsibility’s current predictions anticipates that price increase will continue until 2026, albeit at a more manageable pace.
We expect property prices to climb by 3.2% in 2022, with no signs of a price drop in the estimates.
Sales volumes may easily surpass 2007 by the end of the year, with sales in the region of 1.3 million in 2022/23, an increase of 8% above the longer-term average (2015/16 to 2 million in 2022/23). It’s clear that the market is competitive. So, how can you navigate it?
Do Your Pre-Approval Homework
Before you even start looking at homes, head on over to a lender (or multiple lenders to get different quotes) and get a pre-approval letter. We know it’s not very exciting, but it just might save you later.
Don’t bother getting pre-qualified because it’s not the same thing as getting pre-approved. Pre-qualification is a quick process based only on the information you provide; the lender doesn’t verify it. Pre-approval requires lenders to verify income, credit, and other essential numbers that indicate how much you can afford.
Be Faster Than Everyone Else
You’ll need a local estate agent to inform you through email or other means when a new house comes on the market. The data for Rightmove, Zoopla, PropertyPal, and other sites comes from the local agents. They retrieve data many times a day. But your local agent will get it immediately, allowing you to see a new home before anybody else.
Once you’ve located the home of your dreams, make an offer immediately away. Prepare your negotiation strategy ahead of time (an agent will be happy to help you figure these out in advance).
Think About Contingencies
Contingencies are expected, but in a competitive market, they may not get you very far. If you intend to sell your current house before purchasing the new one, you won’t get very far.
You can also consider skipping the house inspection contingency, but this is something we NEVER advocate. If something goes wrong with the house you don’t see, you might be on the hook for thousands of pounds in repairs. In a competitive market, an agent can advise you on whether or not it’s a good idea to go without contingencies.
SOMETHING TO CONSIDER…
In the medium term, the Chancellor hailed the economic situation as “solid,” with the Office for Budget Responsibility predicting that the economy will recover to pre-pandemic levels six months sooner than predicted (by 2022). Funding for new houses, brownfield land, and unsafe cladding removal was among the key housing market announcements funded by a 4% developer tax (for companies with earnings above £25 million).
The government is expanding on current promises by approving a nearly £24 billion multi-year housing settlement to transition Generation Rent into Generation Buy. The Chancellor has also pledged £65 million to modernise England’s planning system. Including digitalisation, to make local planning information more accessible.
If you are thinking of moving house and aren’t sure where to start looking, give our team at Qube Residential a shout for any queries. A member of our friendly team will be happy to assist you with any questions.
Source: Dataloft, OBR, Zoopla, HMRC