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Thursday, December 1, 2022

Buying a house in 2022: why are there no homes for sale?

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H

oping for an Easter break from work I headed to Brighton for a couple of days at the seaside. As it turns out there’s truth to the old adage, you can escape your surroundings but you can never escape yourself – or your job.

The weather was glorious, but most people I spoke to would rather have spent the sunniest day of the year on house viewings rather than on the beach judging by the, frankly rather one-note, conversations I had. And yet, there were no houses for them to view.

One couple gave up on south London house prices during the pandemic thinking they could stretch their budget on the coast. Instead they were in town for only their third physical viewing in six months.

Another couple are forsaking the South for Sheffield. Or they would be if they didn’t keep getting outbid on potential new homes.

Even in Marylebone a hopeful trader upper is finding it’s not the prices holding them back but the lack of a single flat on the market.

The one question they all asked me: why is no one selling? House prices rises are in the double digits, two thirds of properties are selling within a month of going on the market and despite the looming cost-of-living crisis and interest rate rises, buyers are still queuing up at the merest sniff of an estate agent’s board. And yet the number of homes on agents’ books is historically low.

Partly this is because – aside from those facing changed life circumstances (the old debt, death and divorce) – there’s no real pressure on homeowners to sell. Mortgages are still as cheap as they’ve ever been while rents are rising again, encouraging landlords who might have sold up to hold fire.

It also reflects the general uncertainty arising from the Ukraine war and the cost of living squeeze, saysTom Bill, head of residential research at Knight Frank.

“In many cases, low supply has been the result of a vicious circle, with prospective sellers holding off because they are unable to find anywhere to move into themselves. The end of the stamp duty holiday also played its part in deterring new sales instructions.”

The good news is the tide may be turning. The most recent RICS market survey suggests spring has sprung in the property market with the number of homes listed for sale up for the first time in a year, while Knight Frank said the number of new sales instructions across the UK in March was only 0.5 per cent below the five-year average. But demand is still rising faster than supply — the number of new buyers was 56 per cent higher than average.

Most people expect the market to calm down this year with Knight Frank forecasting single rather than double-digit price rises this year and next. Nonetheless, as prices soar and interest rates and inflation boom, if this is your window to buy, grab it.

How to find a home to buy in 2022

But how do you go about finding a home for sale, and when you do, how can you make sure you’re the one who secures it?

Sometimes the analogue methods are the best. “I’ve just posted notes through people’s doors for a client in Queen’s Park,” says Karen Goodin at buying agents Heaton & Partners. “There’s very very limited stock around and there’s huge interest for houses with gardens, much more than there used to be.

“My brother’s just sold his house and he had five viewings and three offers on the first day.”

Goodin says the successful bid was about more than money, although the people who had their offer accepted did offer slightly over the asking price. “But maybe he would have gone for them even if they others had upped their offers because they positioned themselves as the best buyers.

“They’re in rented accommodation, they have a mortgage agreed in principle so they can move quickly, and they’ve been flexible with the move-in date and are happy to move in July, giving my brother time to find somewhere to live.”

If you’ve got a good buyer for your current property and just haven’t found the next place to move to then Goodin says you could even move into a rental to make yourself a less risky prospect for potential sellers as not part of a chain, although this does depend upon your own appetite for risk.

Cash buyers are also more attractive to sellers because they don’t have to wait for financing to be approved.

If you can afford it a buying agent can also help, and Goodin says they get a lot of customers buying around the £1 million level.

“The comprehensive knowledge buying agents have of the property market, matched with their experience ensures the buyer can find the best possible deal, whilst being exposed to homes that are either yet to come onto the market or have only just been released, putting them at the front of the queue,” agrees Matt Turner, founder of Astute Property Search.

“If your budget doesn’t allow for extra support then I would recommend conducting comprehensive research to put you ahead of the curve.

“Scour property listing sites. Find agents you trust or with good records in your desired areas and monitor their website or call them up to build a relationship and be made aware of what’s coming on the market and when – at the end of the day agents want to make a quick sale for the best price, so they will always take a keen buyer seriously.

And Turner advises buyers shouldn’t be afraid to add a personal touch. “We’ve had instances where potential buyers have won a secured bid situation by going the extra mile with the sellers with a personal gesture or letting them know why they want to live there so badly.”

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