Why sell now?
Autumn is unquestionably one of the best times of year to sell. A deluge of buyers flood back in from the summer holidays in time for the start of the new school term, with those looking to trade up or buy-in motivated to get installed in their new homes before the Christmas festivities kick off. This creates a significant volume of buyers clamoring to snap up the best properties, leading to a spike in demand and a higher chance of getting a higher price. So naturally if you’re a seller this is a good time to get your property on the market. If you’re still on the fence, however, consider the following. Prices in Fulham (and London generally) have risen astronomically over the last few years, setting new heights as buyers scrabble to get on the ladder. These eye watering gains – up to 25% in twelve months – have led to a considerable amount of speculation in the press about overheated prices and bursting bubbles, which coupled with the recent Mortgage Market Review (MMR) has led to a noticeable cooling of the market over the last few months. Prices haven’t started coming down yet, but buyers are becoming far more cautious about paying what they see as potentially a grossly inflated price. More and more are opting to rent and keep one eye fixed on the market, waiting for movement (preferably down) before jumping in. Some market soothsayers are also predicting a significant New Year flop during what should be a busy period at the start of 2015, due to the uncertainty surrounding the up-coming general election and what a new government might do with interest rates. This could make selling in 2015 significantly more difficult than this year, so if you’re considering a sale and miss this Autumn, you could be forced to consider for somewhat longer than expected.
What’s the market doing right now?
Just look at any one of the sold price graphs in this book and it doesn’t take a genius to work out that property prices in Fulham have quite literally ramped up and up... and up. Looking at the figures it’s easy to see how this surely can’t be sustainable, even though a recent Zoopla survey revealed 92% of London homeowners think prices will increase next year (down from 98% last year). Indeed, a recent survey of estate agents concludes that growth in house prices has “ground to a halt, falling to its lowest rate in 18 months”.
Of course the fact remains prices are unlikely to fall, with chronic shortages in supply and very few forced sellers in the area, but there’s mixed reports coming in with Price Waterhouse Coopers recently predicting an overall increase of 13% during this year, a large corporate estate agency suggesting a 3% rise over 2015 and The Centre for Economics and Business Research (CEBR) suggesting 16.1% in 2014 for the year and a drop to 11.4% over 2015. What seems to be consistent though is that everyone, including the owners themselves, think prices will slow down but not reverse with some such as CEBR even forecasting an average UK house price growth of just 3.4% come 2018. With a mortgage cap coming this October and the Mortgage Market Review (MMR) in full swing slowing down lending, not to mention the up-coming election it seems that the housing market has come off the crazy pills for the time being, making it an excellent time for sellers to cash in significant gains and buyers to make more rational purchases as it returns to a state of relative normality.
How do I get the highest price?
With the market on a chill pill and buyers cautious of over spending, the number one most important factor now for potential sellers is setting a realistic asking price. This cannot be stressed enough.
When the market is roaring (like it was up to a few months ago) it’s easy to swing in gung-ho with massive asking prices, oozing confidence and the ability to sit it out as the market rises to meet sky-high expectations. But when the market loses its forward momentum the margin for over-the-top or downright inaccurate valuations becomes limited indeed.
The temptation to go for the highest valuation can be intoxicating but will ultimately hit you in the pocket. As every budding economist knows, price is driven by supply and demand, so make sure you don’t price yourself out of the market! The aim is to create the greatest demand possible while still maintaining value, this can sometimes come down to the finest tweaks that are simply not possible to achieve if you and your agent are not paying meticulous and level headed attention to your asking price.
It’s harder to reduce your price without looking desperate and losing the power of your market debut, than it is for a more realistic asking price to be pushed upwards by interested buyers. Accurate pricing therefore, even if it seems to be too low initially in your opinion, will without question bring you in the most desirable result.
Is it a good time to buy?
If you’re selling chances are you’re buying somewhere else, and now could be a great time to buy. With slower price rises and more caution in the market, it’s less likely that you’ll be forced into making a rush decision or grabbing whatever you can get before someone else swipes it from under your nose.
That said there’s still a lot of demand for property at the right price from savvy buyers like you, and no doubt there’ll be more movement, downward, in asking prices as sellers and their agents slowly catch up with the need to set a realistic asking price, allowing you to get in with a fair deal after other buyers have walked away.
With the election looming on the horizon and with more attention being focused on the mortgage market, it could be wise as an owner to cash in any significant gains made in the recent madness, up-scale and grab an affordable fixed mortgage before rate rises hit mid-next year. Or of course you could sell, and with affordable rental prices, step out of the market and rent instead whilst keeping a close eye on the market. With less worry about imminent price hikes and some talk of a flat sales market for sometime you could be playing it relatively safe whilst giving you the time to find the perfect new property. Be careful though, as in general we would always advise you to be in the market, rather than out.
Up to £600k
New Kings Road, 1 Bed Flat, sold for £585,000
Today you won’t get much more than a well located one bedroom flat or small two bedroom flat in Fulham for under £600k. There’s not a lot of property available in this price range and demand tends to come from first time buyers requiring large mortgages. The recent Mortgage Market Review (MMR) has consequently cooled demand across
this price range.
£600k - £1.0m
Whittingstall Road, 2 Bed Flat, sold for £800,000
This price bracket encompasses the bulk of the flat market in Fulham. For this you’ll get a well located two bedroom flat – the most common property type in Fulham – with houses under £1m now virtually extinct. Recent price hikes have pushed a glut of property up toward the million barrier, intensifying competition for good apartments at the lower, sub £850k end.
£1.5m - £2.0m
Horder Road, 3 Bed House, sold for a record price of £1,360,000
Once the core house market, these days £1m to £1.5m will just about get you a terraced house in the ‘Munster Village’ area or a rare smaller home closer to Parsons Green. There are a lot of buyers in this bracket, many flush with newly created equity in their existing property following the astounding capital growth of the last two years. Demand is high.
£1.5m - £2.0m
Ewald Road, 4 Bed House, sold for a record price of £1,650,000
The majority of desirable terraced houses in Fulham now fall into this price band, and there are a lot of people ready and able to snap up quality homes in this range creating intense competition, particularly sub £1.85m. There is still some potential for upward movement towards the stamp duty band at £2m, so buyers would be well advised to move quick on good homes under £1.75m.
£2.0m - £2.5m
St. Dionis Road, 4 Bed House, sold for a record price of £2,100,000
There aren’t many houses around at this price level, especially closer to the 7% stamp duty band at £2m. The problem is buyers spending this amount want a good location and a decent size. As such owners and buyers tend to extend their smaller, well located terraced houses with basements or look further afield in west Fulham, making potential buyers more indecisive and slowing the market.
Finlay Street, 6 Bed House, sold for a record price of £2,999,950
The top of the Fulham house market. Buyers here tend to be City workers with a closer (read more cautious) view of the market, and are more reluctant to shell out ‘the most ever’ on a Fulham home. This tier of the market is more closely related to values in other prime London areas, and like those other areas, the market here has been considerably slower for the last six months or more.
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