A calm is descending on Britain’s property market. After two and half years of soaring prices and frantic bidding wars, for sale signs are staying up longer and estate agents’ phones are quieter.
In 2020 and 2021, there wasn’t the usual pre-Christmas slump. Buyers were keen to take advantage of the stamp duty holiday and rock-bottom home loan rates, even during the December festivities.
But this year is different. Money Mail has spoken to estate agents across the country and many of them say the housing bubble has burst, with soaring mortgage costs putting buyers off moving.
Cooling market: Last month, seven in ten estate agents saw most sales agreed at below asking price, according to industry body Propertymark
‘I have never seen the market go from so warm to so cold in such a short space of time,’ says North Wales estate agent Ian Wyn-Jones.
‘Properties are being put on the market for £250,000 and selling for £180,000.’
Lesley Prescott, a surveyor at London-based Reliable Property Group, agrees.
‘It is the fastest hot-to-cold market I have ever seen,’ she says.
‘The current trend is a downward spiral as vendors struggle to sell their homes, due to the process taking longer than 15 weeks and mortgage offers being withdrawn from buyers. There are roughly 50 per cent fewer properties being processed.’
Suddenly, the power is back in the hands of house-hunters. It means there is a chance to haggle on prices again.
Last month, seven in ten estate agents saw most sales agreed at below asking price, according to industry body Propertymark.
In March this figure was just 15 per cent. And data from estate agency Hamptons shows the fewest homes in England and Wales achieved their asking price in November since January 2021.
Buyers have been made nervous by headlines suggesting a housing crash is imminent. Earlier this month, one of Britain’s largest lenders, Halifax, forecast that property prices would fall by 8 per cent.
This means about £23,000 will be shaved off the value of an average home. Yesterday, Nationwide predicted a similar fall, but remarked that any crash would have a ‘soft landing’. However, agents are not so sure.
Gloomy outlook: Earlier this month Halifax forecast that property prices would fall by 8%. This means about £23,000 will be shaved off the value of an average home
Joel Edgerton, of Wigan estate agency Regan and Hallworth, says: ‘We’re definitely in a buyer’s market now. We’re seeing houses being sold for less than they would have fetched earlier in the year.’
But buying agent Emma Fildes, who runs Brick Weaver in London, spies an opportunity. She says: ‘In the past two years it has been bidding war after bidding war.
‘Now you can more aggressively turn around and negotiate a better price. Everyone is doing it. No one wants to feel they are overspending right now.’
First-time buyer Robert Bolohan plans to buy a property with his wife Mariona in the new year — and intends to haggle.
Now you can more aggressively turn around and negotiate a better price. Everyone is doing it.
The couple had all but given up on their home ownership dream after prices soared in recent years, thanks in part to pent-up demand from the pandemic and stamp duty cuts.
They have been living at home with his parents in West Drayton, London, while they save money.
Robert, 28, who runs his own translation business called Lotuly, says: ‘Just a few weeks ago we went to see a couple of houses in the Reading area.
It was really nice because these areas were so expensive last year, but now they feel so much more affordable.’
He adds: ‘I am a business owner; I negotiate in almost everything I do. So, of course, when it comes to finding a home, I am fully expecting to haggle politely.’
However, experts warn that buyers are out of practice when it comes to negotiating and need to bear some simple tips in mind.
First, it is important to gauge the appetite of the seller, says Ms Fildes. ‘Are they getting divorced or are they having marriage problems — therefore, do they need to sell quickly? You need to know what you’re doing before you pitch your offer.’
Secondly, she says, negotiations must be initiated early in the process, otherwise things can get ‘messy’. Experts recommend focusing on making yourself an appealing seller.
Property consultant Alex Goldstein, based in London, says: ‘If you’re trying to negotiate from a position of strength, you need to have everything ready, including your ID, mortgage agreement in principle and having a solicitor lined up.’
Ms Fildes says buyers in the current market should only expect to cut down the price by no more than 10 per cent.
Mr Goldstein adds: ‘You can overstep the mark.
‘It’s a people business and, if you come in with a lowball offer, then you’re going to anger the seller. If you get off on the wrong footing, then it breaks trust.’
Five tips to haggle on a home
Buyers’ market? Many experts are suggesting a housing crash is imminent
1. Be flexible with time-frames
Some sellers are happier to negotiate if you’re flexible about your move-in dates, says property consultant Alex Goldstein.
2. Know when to sign
Consider why you’re buying the property when negotiating, says Alex Mosley of broker Perrygate:
‘If it’s a dream home, don’t risk negotiating the price down.’
3. Do your homework
Check websites such as Rightmove to get an understanding of what is for sale, says buying agent Emma Fildes: ‘You really need to know what you’re doing before you pitch your offer.’
4. Cosy up to your estate agent
‘That is vital,’ says Alex Goldstein. ‘This is a people business — so if you’re responsive, they will portray that to their client.’
5. Be realistic
Don’t get carried away when negotiating, says Joel Edgerton, an estate agent based in Wigan: ‘You have to think about what you believe a property is worth and be realistic.’
How much could you afford to borrow? Check monthly payments with our best mortgage rates calculator, using loan size and house purchase price
Above all else, buyers must be realistic, as not all homes will be up for negotiation.
Aneisha Beveridge, head of research at Hamptons, says in the current market you are more likely to be able to haggle down the price of a larger home than a one-bedroom flat.
It signals a reversal of the pandemic-induced ‘race for space’, when buyers were demanding bigger properties with more spacious gardens.
She says: ‘As mortgage rates have risen, higher repayments are causing buyers to forfeit space in order to climb onto the housing ladder, boosting demand for smaller homes.’
And at the top end of the market, house prices are expected to remain buoyant.
In holiday hotspots, for example, estate agents seem unfazed by news of a property market crash.
Shireen Cunliffe, who works for John Bray estate agents in North Cornwall, says: ‘We are in a prime location where sellers will always hold out for the best offers they can get.
‘There are no signs showing that this will ever be a buyers’ market.’
