While we can’t stress how much buying and selling property is about finding a suitable place to live and a roof over our heads, we are British and that means there’s an intrinsic link between how much our homes are worth and how successful we are.
That’s why the most recent research from Moverly is disconcerting. Houses and flats for sale are taking so long to proceed from an offer being accepted to legal completion that they are losing value along the way.
A lack of upfront property information, inefficient estate agents, a sharp rise in fall throughs, an archaic conveyancing system and slow moving mortgage approvals can all add weeks – months even – onto transactional times. To put this detrimental delay into greater context, Moverly took the average time it takes for a sale to move from an offer accepted to a new legal owner – which currently stands at a whopping 150 days – and cross-checked this with house price movement over the same number of days.
Alarmingly, it found that in 36 areas across the UK, purchasers were discovering the home they were buying was plunging in value while the administrative and conveyancing processes took place. The slump in price was substantial in many areas, with Kensington & Chelsea leading the ‘loss in value’ pack. Here, a home being purchased dropped £1,299 for every day it took between offer accepted and completion – a total fall of £194,806.
Other areas where house prices were plummeting in the 150 day period included Hammersmith & Fulham, Westminster and Islington. Declines in value weren’t limited to London either, with properties in South Lakeland, Stratford-upon-Avon and Guildford all losing between £10,391 and £21,644 before the new owner moved in.
Will house prices continue to fall?
Open Property Group always monitors house price indexes and housing reports, and their producers have one thing in common – they all think house prices will fall in 2023. In fact, an article in MoneyWeek rounded up this year’s property price predictions. Both Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and Zoopla are predicting falls of 5%. The Office for Budget Responsibility (OBR) expects prices to fall 9% over the next two years.
Why falling values matter to sellers
No buyer wants to purchase an overvalued home and when values are dropping like a stone, a number of negative things can happen. Firstly, if values are falling away sharply, the gap between what a buyer has offered and what the home is currently worth could be too prominent to ignore.
Matters can be made worse if a surveyor down-values a property during a mortgage valuation – news that can prompt a buyer to walk away due to financing issues or haggle aggressively on the price. Other buyers won’t want to start life in a new property with negative equity – when their mortgage debt exceeds the current value of the property.
Sellers who think they are safe once exchange takes place may need to rethink if the market drastically falls away. In usual trading conditions, the thought of losing their entire deposit and paying additional costs is enough to deter buyers from withdrawing after exchange but if the drop in value is greater than their deposit – and they were buying the property with the sole intention of flipping it quickly for a profit – they may cut their losses and pull out of the purchase.
Slash 150 days to just 7
Sluggish estate agents and slow mortgage approvals can be avoided if you want to drastically reduce the time it takes to reach completion – and the time during which a home may lose value. Open Property Group specialises in express property sales and we can usually buy a property and exchange within seven working days.
How is this possible? We are professional investors and make almost immediate cash offers – there’s no dithering, indecisiveness or drawn-out open market process for our sellers to contend with. Open Property Group also has instant access to our own cash funds, so we don’t need to go through a lengthy mortgage approval process to buy a property. With delays eliminated and our team of professionals at the helm, Open Property Group will reach exchange within days of a seller agreeing to our terms of business.
If you’d like to know if your home is in an area where property values are falling, or you would like the fastest, most secure property sale available, please contact Open Property Group today.
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