Post credit crunch, answering this question will never be the same again. Of course, it’s impossible to answer for someone else. But it is a question of universal concern to anyone who owns a propery.
Debating whether to sell usually comes up in relation to the timing of a sale e.g. should I sell my house now. Or possibly in relation to renting or a financial issue. The money side of things matters more
now than ever before. It’s easy to see why.
House prices have fallen quite dramatically in nearly all of the UK with signs of recovery only in a few small pockets. But the squeeze is really on because incomes are falling too.
This is significant not just because you may feel squeezed. But because it impacts what you can borrow to fund another purchase.
No small wonder that the number of house sales is very depressed. As a result the total value of lending among the big seven lenders is surprisngly low.
For the most part the credit crunch hasn’t changed how we feel about owning our homes. Home ownership is tied to our net worth, our sense of accomplishment and the main source of most people’s capital.
You can’t think about selling unless you have a plan. Therefore the real question is something like “I don’t know whether to sell my home and …..?”. Most of us also admit to dithering before making a decision!
This has been particularly true as we have all got used to low interest rates. It’s been very nice for borrowers thank you very much.
But even with interest rates at record low levels, no one can be complacent. The recent changes to SVR by some lenders has shown that taking a “wait and see” approach to interest rates may not be the best option.
Of course we can’t control what the banks do. But that doesn’t mean no one should sell their home. After all, if rates are sitting at an all time low, there’s only one place they can go.
Selling and buying will be tricker as long as bank lending to homeowners remains at a vastly lower levels. People that could be buyers are struggling to get finance or are worried about their jobs.
Deciding to sell your house now could equally be damage limitation or an opportunity. There are certainly arguments that say if you sell at a lower level than you’d hoped, you can recover that on your purchase. Equally, you could be questioning whether it’s time to rent. It won’t take much of an increase in interest rates to make renting more attractive.
But if you’re hoping to buy a new property, is there anything worth buying? A consequence of the credit crunch is that some people are put off selling. The stock of properties available may not be very attractive.
So even if you do decide to sell and are lucky enough to get a buyer, you may have to compromise on your purchase.
But it’s not all doom and gloom. Properties are continuing to sell. This gives hope to others trying to decide whether they should put their house on the market.
There’s never a good or bad time to sell. Remember when house prices were rising? You may have benefited but if you were trying to buy, you may have ended up paying more than you should have.
The housing market, regardless of what is happening, always poses difficult questions for buyers and sellers:
Is now the right time for me to sell?
What things could I consider before making up my mind?
Am I better to sell then rent?
Will I lose money if I sell now?
Am I better to wait till the market improves?
Are bank interest rates a cause for concern?
Does selling at a loss ever make sense?
All tough questions.
But coasting is not an option. The recent changes to the standard variable rates of some products has shown that. Even if you decide to wait out the doom and gloom, you can still make positive choices.
Improving your security by switching to a fixed rate mortgage might be one option. Making additional capital payments to reduce the size of your borrowing, another. Looking for ways to add value to your house may be another.