If you’ve been holding onto an unoccupied property over the course of the pandemic, you might be wondering when the best time to sell really is. House prices have been rising faster than we’ve seen in years and with demand increasing for housing across the country, sellers could be in an incredible position when it comes to opportunities. Question is – is now the best time, or should you hold out for a better time? We’re investigating below.
Why Are House Prices Rising So Much?
At the start of the pandemic, it was predicted that the housing market would crash due to low demand, restricted movement of people and more, but the reality was in fact very different. The housing market saw a boom just as big, if not bigger than the boom of 2005, with house prices soaring and demand increasing by the day. The question is – why?
While housing prices have been on a generally upward trajectory since the financial crash, the pandemic has well and truly sped that up. In fact, house prices are said to be an average of 10.2% higher than the previous year, with some of the biggest rises taking place outside of cities and in more rural areas. Cornwall overtook London as one of the most searched for places to live, and central England and Wales have really taken the lead in terms of housing prices and demand.
The issue, however, is that the housing market just can’t keep up with demand. As people rush to move into bigger homes with more space and better access to the countryside or coast, and as the Stamp Duty holiday comes to an end, buyers have been in a buzz trying to get hold of properties, with some even putting offers in on properties they hadn’t viewed. The lack of supply for the demand in the UK has meant that prices have skyrocketed, and the housing market is more competitive than ever before.
The Effect Of the Stamp Duty Holiday
The Stamp Duty Holiday was introduced in 2020 as a form of encouragement for people to get out there and buy homes and since then, has proven popular with buyers across the country. It ran from 8th July 2020 to 1st July 2021, and then from 1st July 2021 and phased out by 20th September 2021.
The holiday saw the ‘nil’ rate band – the price at which you start paying Stamp Duty – rise to £500,000, meaning that most home buyers were getting to avoid this tax for a longer period of time. This was reduced on 1st July 2020 to a nil band rate of £250,000 and was due to go back to the standard £125,000 on 1st October 2021. This tax holiday has encouraged buyers to take to the housing market and, ultimately, increased demand and a sense of urgency as the cut-off date approaches.
Low Inventory
As mentioned before, there is a current lack of supply for the level of demand in place in the housing market and for sellers, this could definitely work in your favour. Between the Stamp Duty holiday, low mortgage rates and a faster turnaround on mortgage approvals, more and more buyers are finally taking to the housing ladder but what this means is that, for buyers, there just aren’t enough properties available.
As a seller, this means more buyers likely to be interested in your property and at more competitive prices. You may even see higher than listed offers as buyers try to price each other out of homes across the UK, particularly those in more rural areas, where access to the coast is easy and those that are perfect for families with enough room for work and play.
Will House Prices Fall?
The pandemic has proven that it’s difficult to predict just how the housing market is likely to behave over the coming years, but there are a few things that might affect whether house prices continue to rise, or whether the increase reverses. The end of the furlough scheme at the start of October may mean that buyers can no longer afford mortgage payments and may stop looking for properties, and with the end of the Stamp Duty holiday coinciding with this, it’s possible that fewer people will be seeking out new properties and homes. Interest rates also have the potential to rise, which could price people out of the housing market and slow demand overall.
Should I Sell My Unoccupied Property Now?
What all of this means is that now is quite a lucrative time for sellers in the UK, particularly those with unoccupied homes that are ready to be sold and filled immediately. The current low supply for the high demand means that sellers have the opportunity to get their properties out there and in front of buyers who are proving eager and sometimes desperate to get their hands on their own home.
As an unoccupied property owner, you are in a unique position in that you may not be looking for another property while selling your current one. Sellers who are also looking to buy can struggle to find exactly what they are looking for, slowing the process down but if you already live elsewhere, you could sell your property now and wait until the potential price fall in the next year or two to purchase another property if you wish.
Unoccupied Property Insurance
In the meantime, it’s important to ensure that your property is kept safe and secure during the sales process. Unoccupied property insurance can cover properties that are due to be let out to tenants or can provide cover for properties that are due to be renovated, repaired or even demolished. Whatever the case, this insurance policy will ensure that any accidents or damage are covered, including structural damage, theft or vandalism and may also offer legal expenses and public liability insurance.
If your property is currently unoccupied and there is no current contract with a potential buyer or lease agreement, then this insurance policy is the one for you. We are happy to talk the policy through with you to determine whether this is the right cover for your situation, so feel free to get in touch with Ashburnham Insurance for a fast and free no-obligation quote.