Property price web content for Legal & General.
L&G wanted to build trust as an impartial financial expert by providing high quality original web content. Here’s one example: I researched, conceived and scripted this film on seasonal property prices, as well as writing the longer form thought leadership piece below for PR and other applications.
You’ll find the film here: https://www.legalandgeneral.com/insurance/home/articles-and-guides/best-time-to-buy-or-sell-your-home.html
Six things to know about property before you buy or sell.
Everyone knows the property market heats up in spring and summer, and cools down over winter. But what does that mean for buyers and sellers? And can you make it work to your advantage?
Of course, apart from first time buyers, most people are both buyer and seller at the same time. And with everything from gazumping and dodgy surveys to non-proceedable offers and iffy chains to think about, you might just decide that factoring in timing as well would be the last straw in an already stressful process.
However, look a little more closely at how the housing market works from year to year and you’ll see some interesting patterns. And understanding these seasonal patterns could help get you a better deal next time you buy or sell.
Researchers at the London School of Economics studied this a few years ago. They started by looking at what is it about the ‘hot’ months of April to September that makes them such a popular time to buy and sell. There are the obvious things, like the renewed optimism of spring, gardens looking better in warmer months and people having more time over summer holidays.
It’s got to be … perfect
What the researchers realised is that underlying all this is the simple fact that no two houses are quite the same. And what’s more, people place a really high importance on finding somewhere that’s the perfect fit for their family.
This means it’s easier to find a suitable home in the hot season, when there are lots of properties on the market. Many people are happy to pay higher prices just to make sure they have that choice.
And it can add up to a really big price difference. For example, if you’d bought a home at the September 2016 national average price of £217,888, you’d have paid over £12,000 more than if you’d bought the same property that January. In fact, UK property prices rose by 7.7%* in the year to September 2016.
The local news
Just how much of a difference you’ll see between the cold and hot seasons also depends on where you happen to live. For example, East of England prices rose 12.1% in the year to September 2016. London prices were close behind, with a 10.9% lift. While in the North East, prices rose just 1.5%.
What that means is that you’ll get much bigger benefits from taking seasonality into account when you buy or sell if you live in a high-growth area like the South East.
So now you know what’s behind seasonal ups and downs in property prices, let’s look at the implications. Here’s what six common property situations can mean for you.
Buying when the market’s hot
This is the time of year when there’s the biggest choice of properties on the market. That gives you the best possible chance of finding the elusive a property that ticks all your ‘must have’ boxes.
The downside is it’s also when the most buyers are active. So there’s a lot of competition, and more risk that once you’ve found your dream home, another buyer will snatch it from your grasp with a higher offer.
And of course, you’ll also be buying when prices are highest. Depending on your budget and where in the UK you live, that could add tens of thousands to the cost of your move.
Selling when the market’s hot
If you don’t have a property to buy, it’s going to make sense to sell in the hot season. Prices are at their highest, and with more buyers competing for properties you’ve got the best chance of a quick sale. In some parts of the country, you may even receive offers over the asking price.
But if you need to buy somewhere as well, it’s more of a trade off. If you want to maximise the price from your current property and have the best choice of places to buy, go for the hot season. Or if you want to get the best deal on your new property and you’re prepared to be flexible on your ‘must haves’, you may want to consider looking in the cold season. It’s your call.
Buying when the market’s cold
This is the time of year when you’re most likely to pick up a bargain. If you’re a first time buyer, it’s a great time to test the water, particularly if you don’t mind compromising a bit to get a foot on the property ladder. After all, the chances are you’ll move on in a few years’ time.
Selling when the market’s cold
If you’re selling a property and don’t need to buy another one, you’ll almost certainly get a better return by waiting a while and putting your property on the market in April. If you’re buying as well, you should be able to get a reasonable bargain so long as you can actually find a property that works for you.
Of course if you’re not a first time buyer, you almost certainly won’t have the luxury of being able to buy without selling another property. But if you’re trading up or down in the same area, understanding hot and cold seasons could still help give you an advantage.
Other things being equal, if you’re trading down to a less expensive home it makes sense to do it in the hot season. You’ll get the best price for the home you’re selling, and while you’ll pay a premium for wherever you buy, overall you’ll end up banking the most cash.
It’s exactly the opposite situation when you’re trading up. Again, other things being equal, the hit you’ll take by selling your existing home in the cold season should be outweighed by what you save by buying a bigger home at its lower price.
Moving to a new area
You could be perfectly poised to make the hot and cold seasons work for you.
We all know location is massively important when you buy a new home. But if you don’t know the area you’re moving to well, it takes time to work out which district you should be in.
That’s why it could make a lot of sense to rent for a few months to get to know the neighbourhood. Six-month tenancies are very common, and could give you the perfect way to step out of one region’s hot season and into another’s cold season.
Over to you
Whatever you want to do with your property, we hope understanding some of the forces that drive the market will help you buy and sell smarter. And we’d love to hear your experiences too. Why not add a comment below.
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