How to navigate the housing market in 2023 as a buyer

Following two or three years of housing market insanity that saw record house prices broken almost on a weekly basis and unprecedented demand far outstripping supply, there is no question that some semblance of 'normality' (whatever that is) has been dragged back into the housing sector by more challenging economic times.

Related topics:  Finance,  House Prices,  Sellers,  Buyers,  Housing Market
Property | Reporter
27th February 2023
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James Greenwood of Stacks Property Search, says: “Property is one of the only things that isn’t suffering from inflationary pressure. Prices are no longer going up for the majority, so property is effectively becoming better and better value.

“In some sectors, prices are dropping, but for individual properties at the middle and upper end of the market, there’s no certainty that prices are falling, although they have almost certainly stalled. The froth has evaporated, and the frantic days of competitive bidding with properties selling after a single viewing are, mercifully for buyers, mostly over.”

So does that mean it’s a buyers’ market?

James adds: “It’s a market that’s no longer skewed so firmly in the favour of the seller, but in many sectors and areas there’s still a shortage of property.

Clare Coode of Stacks Property Search in Cornwall, says: “Vendors in prime areas of Cornwall are selling off market first to see if they can get a top ’22 price before they go to the open market in spring. For ‘best in class’ period and coastal properties there’s a bottleneck of buyers and agents getting these premium prices, but for more mainstream properties they will probably have to adjust the price to a more realistic level for the open market.

Bill Spreckley of Stacks Property Search in Hampshire agrees, adding: “There has been so little supply over the last two years that the latent demand has still not been satiated and there are still plenty of buyers looking for their family homes. However we are seeing the beginnings of a small correction, the days of buyers scrabbling to secure a house at 25% over the asking price are over, and going forward bids will be more considered. The best-in-class houses will still attract a lot of interest if they are priced sensibly, but other vendors may have to curb their expectations and either drop their asking price or accept a lower offer.”

Nick Cunningham of Stacks Property Search in Devon, comments: “There are more properties coming to the market on the north Devon coast, but further south there continues to be a shortage of good quality properties in the £1.25-£2.5m bracket. Vendors in prime areas such as Topsham are still hoping to get top ’22 values using an off-market approach, creating hype on social media, and in some cases, they will probably achieve these prices. But these are the exception rather than the rule.”

James notes: “This multi-tiered market makes it very difficult for buyers to know where to pitch an offer. It’s important to understand how the guide price has been arrived at – whether it’s based on historical or recent comparables. Buyers would do well to check whether the guide price has already changed, how long it’s been on the market, and whether there are any offers on the table. Some sleuthing will pay dividends as a combination of this information will help you decide where to pitch an offer.

“For non-discretionary sales, when there’s really no pressing reason for the vendor to achieve a sale, the less bargaining power you will have.

He adds: “Buyers who are frustrated and disheartened by the apparent lack of stock should find that as we head into spring, more new properties will come to the market, and others that have remained unsold on the ‘off market’ will set a more realistic guide price when they come to the open market. Whether this will be enough to satisfy demand is another question altogether. So buyers should get themselves in a good position to present themselves as a good prospect with finances in place and a willing and able attitude to progress a transaction speedily without being unnecessarily difficult.

Clare advises: “A cash buyer will always have the upper hand, and for those who want but don’t need a mortgage, it often makes sense to exchange with cash and to arrange the mortgage after exchange to cover the remainder of the funds for completion. It goes without saying that this advice doesn’t apply to those who would be unable to complete the purchase without borrowed funds.”

James concludes: “For those who are reliant on the sale of a property to fund a new purchase, 2023 will be a much better year than 2020 and 2021.”

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