| Firstly let's briefly look at what's happened to the | | | | buy and prices will begin to rise again. In addition, |
| property market. In the summer of 2007 | | | | because prices have dropped homes are |
| property prices reached their peak and | | | | becoming more affordable with the average |
| mortgages up to then, had been easily agreed | | | | house price to earnings ratio being 4.56 in |
| with 100% mortgages readily available. At this | | | | November 2008 compared to 5.84 in July 2007. |
| time 40% of the money that the banks lent to | | | | This will support the housing market when it |
| companies and consumers came from big financial | | | | returns. |
| institutions, often overseas and known as | | | | But when will it return? According to the |
| wholesale sources. According to BBC's Robert | | | | pre-budget report credit conditions will stabilise |
| Peston, the ratio of our borrowings in the UK | | | | "beyond 2009" so that may mean early 2010 |
| (including consumer, corporate and public-sector | | | | (though predictions vary). The worst time to sell |
| debt) to our annual economic output rose to just | | | | could be in about 6 - 9 months time which will be |
| over a record-breaking 300% (or over | | | | when house prices have fallen further, sellers will |
| £4000billion) which is similar to the US's | | | | be afraid of how much further they will go and |
| ratio of debt to GDP. In August 2007 the | | | | the country is likely to be in the midst of |
| wholesale sources became aware that much of | | | | recession. If the market begins to recover from |
| their money had been invested in the US housing | | | | 2010 house prices will then slowly go up from a |
| market which had already collapsed and saw that | | | | peak to trough fall of around 20 - 25% (though |
| their investments had turned seriously sour. | | | | again, predictions vary widely). How long will it |
| Unsurprisingly, they wanted their money back and | | | | take to recover to 2007 prices? Well, this can't be |
| didn't want to lend more. When the banks paid | | | | answered as it's simply an unknown but it is likely |
| the money back, some banks almost collapsed | | | | to be a number of years. |
| and were only saved by bails out of billions of | | | | If you have to sell now, be aware that buyers |
| pounds of taxpayer's money. And at the same | | | | are waiting to snap up a bargain and offers will be |
| time, the sources of funds for borrowing dried up. | | | | low. Be realistic from the outset about what you |
| It's a time of unprecedented change in the global | | | | are prepared to accept and have a time line of |
| economy. | | | | when you need to sell by. Neither of these can be |
| So now the UK banks have less money to lend | | | | guaranteed of course but by thinking through |
| to businesses and consumers, in the way of | | | | them you will be better prepared to price your |
| mortgages, and only customers considered | | | | property accordingly. This may save you months |
| risk-free are approved. With far fewer mortgages | | | | of waiting and gradually lowering your price. |
| being made available there are less buyers. With | | | | Obviously you don't want to do this especially is |
| less buyers, the property prices drop and when | | | | that would mean getting into negative equity. But |
| the price drops buyers who can secure a | | | | if you need to sell then you need to consider that |
| mortgage want to wait until the prices have | | | | you could be better off taking a low offer before |
| bottomed out, and with the property prices still | | | | the market bottoms out. You need to work out |
| falling banks are not keen to invest in them.... and | | | | your figures and price accordingly. Speak to your |
| so the downward spiral continues. A global | | | | estate agent (and others) and ask what other |
| recession is nearly upon us and more companies | | | | properties in your area are going for. Gather as |
| are likely to need government bailouts. | | | | much information as you can to make a decision. |
| Unemployment will rise and tax revenues will | | | | Selling and moving house is a very personal |
| shrink. It's a gloomy outlook. | | | | decision and many areas of your life are affected. |
| So with this backdrop it is not a good climate to | | | | Decisions may include wanting to downsize to |
| sell a house. | | | | lessen the pressure of outgoings, or to emigrate, |
| As a seller, do you really need to sell your house | | | | or start afresh elsewhere. Moving house often |
| now? Check your reasoning - do you need to sell | | | | signals a new chapter in your life and it's worth |
| your house or do you want to sell your house or | | | | remembering that the reasons for wanting to |
| is it a mixture of the two? Sit down and carefully | | | | move may outweigh the reasons for needing to |
| go through the reasons why you are selling. Can | | | | move. |
| you delay selling your house until the economy | | | | Selling and pricing your property to sell may be a |
| and property prices have turned around? Although | | | | difficult decision to make in the current market |
| lending will not return to the heyday of the | | | | but a low priced property will attract the buyers |
| previous years, stability will come, and those | | | | that do, after all, exist and who are watching and |
| buyers currently waiting to buy property will then | | | | waiting for the right opportunity. |