Warning: the introduction to this article is not for the feint hearted!
A recent survey of 70 leading economists has revealed that in their combined opinions, the UK's economy is slowing down at such a rapid rate that the nation runs the risk of falling into a recession. The Head of Macroeconomics at PricewaterhouseCoopers states that "the UK economy is clearly heading for at least a sharp slowdown with about a one in three chance that this could turn into an outright recession," and the Bank of England Policy Maker is reported in Bloomberg to have told the Guardian that "we are going into recession and we are probably in one right now."
Adding to this gloomy picture is the fact that the British Bankers' Association has just reported that UK mortgage approvals in June dropped to their lowest rate in at least a decade with their Director of Statistics stating that "the whole market is likely to be at its least active since the early 1990s." On top of this, Ernst & Young predict a house price crash of about 10% in 2008. Furthermore, rising mortgage costs, fewer mortgages available and tighter lending conditions are keeping more and more would-be homebuyers out of the market.
Blame game
Against such a catastrophically grim picture of the state of the British economy, and in particular its property based economy, how is anyone going to sell their home in such an appalling market climate? Well, the good news is that it is actually still possible to sell your home in the UK, you just need to apply the following top tips to your sale strategy:1) Remember that where there is demand for property there is life in the property market. Across the whole of the UK there is demand for property based at least on very basic lifestyle fundamentals. I.e., people are born, people get married, divorced, have families and find jobs. All of these factors have an effect on people's housing requirements and lead to there being ongoing and unstoppable life in the property market. This is good news for anyone who wants to sell their home.
2) Because it has become harder for buyers to find mortgages it has become harder for vendors to sell houses. Because it is harder for vendors to sell houses, where a buyer has access to funds they are in a position to drive a hard bargain, therefore if you want to sell your property you may need to be prepared to accept a certain amount of haggling over price.
3) To help avoid this situation as much as possible it is important to price your property correctly right from the start. To do so you need to work with estate agents and also do your own groundwork. Look around at all the estate agents working in your area, examine the property in their windows and see which agents sell houses like yours. You then need to get at least three valuations on your home and compare what agents are suggesting you can ask for your home with what vendors of properties similar to yours are asking.
4) To ensure a sale you might like to consider undercutting the competition to get more buyers through the door and start a bidding war. Taking this approach requires nerves of steel mind you.
6) Whether you're selling your home at auction or through an estate agent, the next thing to get right after the price is the presentation. Because you need to wow your buyers you are going to have to put in extra effort to ensure that your house has not only the kerb appeal we now all know about, but that it is immaculately presented appropriately to your target buying audience.
7) Clean up your front garden, make the approach to your home appealing, clean windows and open blinds and curtains to let in more light. Remember that it is mainly the kitchen, the bathroom and the number of useable bedrooms that will sell your home - so depersonalise the kitchen, scrub the bathroom and empty all box rooms and cupboards and reveal as many extra bedrooms as possible! If you need inspiration it comes in the form of another new series on Real Estate TV called "The Unsellables." Presented by Sofie Allsopp, sister of Kirsty Allsopp of "Location, Location, Location" fame, the TV show targets homeowners across the pond who are struggling to sell their properties but who are also reluctant to give up their dated décor or questionable personal home styling tastes!. The series certainly gives people struggling to sell their properties some good ideas about how to make their homes more marketable.
8) If you've done all you can to make your home 100% presentable but you're being let down by the state of a neighbour's property, do not despair, "Ugliest House on the Block" on Real Estate TV is for you. It's a series that encourages groups of neighbours affected by slovenly and lazy homeowners or less well off and overwhelmed house occupiers to band together and nominate the house that most lets down their entire street. The neighbours who are indeed deemed to live next to the ugliest house on the block win a makeover for the offending property to push not only the value of the ugly home right up, but to secure the values of all the other houses on the street, and to improve the entire neighbourhood. It might just give you the strength you need to tackle your own neighbour about the state of their home.
9) If you still can't shift your home then you may have to consider dropping the asking price but talk to your agent first about why they feel your home isn't selling. Ask them for ideas and suggestions for what you can do to shift the property - but remember, it is in their best interests to keep the price as high as possible because then they make more commission.
10) If you do decide to cut the price of your property the best way to do it is to take it off the market for a month and then re-launch it at the reduced asking price with another agent. You will hopefully get a brand new bunch of fresh faced and eager buyers through the door.
As you can see there is a way to sell a house in any market climate. You just have to price it right and present it well. And in the meantime, while you're waiting for your buyer why not sit back and take inspiration from the informative and entertaining programming new on Real Estate TV throughout the summer months. Tune in to Real Estate TV on Sky Channels 273 & 274, on demand at Virgin TV and at www.realestatetv.tv.
For most of middle Britain falling property prices are seen as a 'disaster' and, in so far as the economy has been boosted by false wealth in property, it certainly is. However, those who would like to get on the housing ladder see things differently.
Young people would probably like to buy their own homes with mortgages using the same 3.5x income multiples that their parents had, instead of being lured into insane deals of 100 - 125% LTV and working themselves stupid to keep up the payments.
In the short term, the coming whirlwind of economic recession will hit old and young alike. Let's just hope that when we pick up the pieces, we target growth on something more substantial than escalating borrowing and debt. The real problem is that much of what has been loaned in the last ten years will never, ever, be repaid.
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