In the current UK property market, house prices are beginning to grow more slowly in many areas. So, as a homebuyer, how can you secure the best deal?
The average UK house price eased off by 3.1% from March to April, according to the Halifax house price index. Annual price growth softened to 2.2%, down from 2.7% recorded in March.
While monthly fluctuations should be taken with a grain of salt, signs point to a softening property market – bad news for sellers, but an opportunity for aspiring buyers.
Which? lays out tips for securing a property at the best possible price in a buyer’s market.
- If you’re thinking of buying a home, and would like advice on your mortgage options, call Which? Mortgage Advisers on 0800 2942 849.
Tips for bagging a bargain property as house prices fall
1. Monitor asking prices
When conditions are tough, sellers are more likely to drop their prices. In March, 86% of sellers sold for less than the asking price, according to data from NAEA Propertymark – a big increase from 74% in February.
It can be worth monitoring listings for areas you’re interested in, and watching to see whether any of them are discounted. A spate of cut-price properties in an area may indicate low demand, meaning it’s an ideal time to swoop in as a buyer.
If the asking price on a property you’re interested in drops, it may be a sign that the seller is eager to offload it.
Find out more: how much is your house worth?
2. See how long the property has been listed
In a quiet market, sellers may see their properties languish on the market for many months.
If you find a property that seems suitable, look at when it was first listed. Sellers who have waited several months for a sale may be more open to lower-priced offers.
Just keep an eye out for ‘portal juggling’, where a listing is withdrawn from a property website, then resubmitted to make it seem like a fresh option.
3. Look at recent sales data
Average prices for an area can help you make comparisons between suburbs. But they don’t necessarily tell you what houses of the type you’re interested in are selling for.
Weakening house prices in an area could bring down the average price, for example, even while prices for apartments are soaring.
To find this level of detail, you’ll need to look at recent sales on a suburb, and even a street level. While the Land Registry shows historical sales, looking on portals such as RightMove or Zoopla will show you more recent sales.
This can show you what buyers have been willing to pay for similar properties, and help you identify pockets where prices are more affordable than others.
You can also work out the level of activity. If you see lots of property listings, but only a handful of sales, you know buyers may be thin on the ground.
Find out more: finding the best places to live
4. Target areas with high supply
The more properties are for sale in an area, the more competition sellers face.
If you’re still shopping around for the right area, it’s worth targeting those with a high number of properties for sale. As an example, if a building of brand new flats has just come on the market, you may be able to buy an older-style flat at a cheaper price than previously.
Just keep in mind that you don’t want to buy in a market that’s over-saturated with a certain type of property, as this might keep your home value down when you go to sell in a few years time.
5. Eye up the competition
Part of the reason for softening prices may be that less people are buying. Figures from NAEA show that the average number of house-hunters registered with estate agents fell to 308 per branch in March, down 22% on the year prior.
The number of buyers will fluctuate heavily depending on how popular an area is.
To get a sense for how much competition you’re facing, you can try talking to the owner and the estate agent about how many viewings there have been – though keep in mind they might exaggerate interest.
If the estate agent holds an open house, when buyers are invited to inspect the property at the same time, look at how many other people are present and whether they seem likely to make an offer.
Find out more: estate agents – registering and your rights
6. Look for a fixer-upper
Sellers often try to boost their asking price with a lick of paint. And in a market where buyers have plenty of choice, these types of properties may attract the most attention.
As an alternative, consider looking for properties that need a face lift. With less interest from other buyers, you may be able to offer a lower price.
Just make sure any desired renovations are factored into your budget – and don’t compromise on a major structural issue or damage that would be costly to fix.
7. Offer below the asking price
Making an offer is one of the most nerve-wracking parts of buying a property. But if you sense the market is moving slowly, don’t be afraid to make an offer below the asking price.
You can use recent sales data from similar properties to work out a reasonable offer. Make sure it’s within the limits of what you’re comfortable paying.
The seller may refuse, and push for a higher offer, but think carefully about your options. While nudging up your offer might be worth it to secure your dream home, you may be able to find a better bargain elsewhere.
Find out more: Making an offer on a house or flat
8. Offer a chain-free sale
Aside from money, there are other incentives you can throw into your offer that may make it more appealing, such as being a first-time buyer who isn’t reliant on a chain.
In a slow market, sellers may have experienced previous buyers pulling out because they are unable to sell their own homes.
In this case, they may be especially motivated to accept an offer from a buyer who has no obstacles to going through with the sale.
9. Get a mortgage in principle
When you start house-hunting, it’s often worth getting a mortgage in principle. This is an agreement by a mortgage lender to allow you to borrow up to a certain amount.
Having a mortgage in principle shows that you’re a serious buyer who is ready to act as soon as your offer is accepted. For sellers keen to make a sale, this might prompt them to accept your offer, as they have some assurance that the sale is likely to go through.
If you’d like to arrange a mortgage in principle, or would like advice on your mortgage options, Which? Mortgage Advisers can help. Fill out the form below for a free call-back.
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