Should we try and sell our family home before the EU referendum?
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We have been marketing our large family house in Hampstead on and off for a couple of years because we are planning to downsize but haven’t found the right buyer at a suitable price. We are keen to move but worried about the current housing market and the impact of the EU referendum. Should we keep it on the market or give up on the idea of selling altogether?
This is a common conundrum for Hampstead and Highgate homeowners thinking of downsizing at the moment but you do have various options available to you depending on how urgently you need to sell and how flexible you’re willing to be.
Whereas a few years ago supply couldn’t keep pace with demand and prices were rising almost daily, for the past year and a half properties have been taking much longer to sell in high value areas in London. A series of events and new legislation, have created uncertainty in the market from last May’s election to autumn’s Stamp Duty changes. At the moment the EU referendum on June 23rd means that most people are reluctant to make a substantial property purchase given the uncertainty over what Brexit may mean for the north London housing market.
The danger with putting the property on the market right away is that people who see it in the papers and on the portals for months and months will start recognising it, stop looking at it and the value will be diminished.
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As a result, my first piece of advice would be sit tight. Although normally I would say that this is the best time of year to sell, for 2016, if you don’t have to sell now – and most people in Hampstead don’t – wait until at least July to put your property on the market. That way we’ll have a clearer idea of what’s going to happen next – if the result is to remain in the EU everyone’s projecting that it will be business as usual, there’s less clarity if we opt to leave. So sit tight until the dust settles. The only downside is that August isn’t a good month to sell, particularly round here, because everyone goes on holiday.
If you’ve already listed your property at the start of this year then I would advise you to take it off the market until after the referendum. Give it a breather, take new photos when the garden’s in bloom and the sun’s pouring in, freshen up the listing, make it look a bit different and change the price.
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Pricing in today’s market is really important, it’s the primary reason someone doesn’t buy a house. Agents should be advising vendors to look at adjusting their asking price by 10 to 15 per cent.
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The market is very price sensitive now. We have one or two magnificent sales happening where people just love the property – we sold one property for £28.8million to an international buyer – but otherwise, the trend we’re seeing across Knight Frank is that if a property is priced right, there’ll be an increased amount of interest on the internet, more viewings and therefore more offers. Of course, you only need one buyer to fall in love with a house and they’ll pay the price, but that’s the exception now, not the rule. Gone are the days when prospective buyers had no idea what a property was worth, it’s all there at their fingertips online now.
If you really need to sell now because you need to free up funds more urgently or you’ve found somewhere else you want to buy there are a couple of options.
You could agree a delayed completion, where there is an extended period between the exchange of contracts and the deposit at an agreed sale price, and the final completion, which could be months or even years later.
The benefit of this is that vendor will receive an amount of money to enable them to move on. The mortgage will stay in the vendor’s name and usually has to be paid by them until the buyer completes, although sometimes the buyer will take over payments or may let out the property to cover these costs. This is a fairly high risk arrangement and should only be seen as a last resort.
Another option would be to rent out your property until you decide to sell it and use the income from the rental for other purposes.
So don’t despair, but don’t expect to sell your house at 2014 Hampstead prices before June 23.
Aree Rand is a partner and office head of Knight Frank, Hampstead. If you have any property related questions for Aree email them to email@example.com or tweet @HamHighProperty.