As a real estate consultant, I’ve watched the market change dramatically over the past few years. Let me share what I’ve seen firsthand helping my clients navigate these changes. During 2020 and 2021, finding properties was like searching for gold during a rush – they were incredibly scarce. Every day, I would sit with frustrated buyers who were ready to purchase but couldn’t find anything suitable. One of my clients, a first-time homebuyer, spent six months looking at properties, only to be outbid 12 times before finally securing their home. The competition was fierce, with properties often selling within hours of listing. House prices shot up by 24% from summer 2020 to the end of 2021, the biggest jump I’ve seen in my career. I remember one particular townhouse that received 30 offers in a single weekend – something that would have been unheard of before the pandemic.
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Current Market Challenges and Changes
The situation in 2023 looks completely different and I’ve had to adjust my advice to clients accordingly. I’ve been helping families navigate through what feels like a perfect storm of challenges. The cost of living crisis has hit hard – just last week, I sat with a couple who had to completely recalculate their budget because their monthly expenses had increased by £400 due to rising energy costs. We’re dealing with the highest inflation since 1981 and when we entered a recession in November 2022, I saw many of my clients put their moving plans on hold. The base rate reaching 3.5% by the end of 2022 was particularly challenging – I had several clients who had to revise their property searches to account for higher mortgage payments.
The Growing Rental Crisis
The rental market has become particularly tough and I’m seeing this impact firsthand. Recently, I worked with a young professional who was paying £1,200 monthly in rent – nearly a quarter of their income – making it incredibly difficult to save for a deposit. The statistics show that renters now spend 24% of their weekly expenditure on housing costs, compared to homeowners who spend 16% on their mortgages. This gap is the largest I’ve seen in my career and it’s creating a real barrier for first-time buyers.
The Silver Lining: More Choice for Buyers
There is a silver lining though – the market is shifting to favor buyers. On Boxing Day 2022, Rightmove reported a 46% year-on-year increase in new listings. This matches what I’m seeing in my daily work – my property database has nearly doubled in size, giving buyers more options than they’ve had in years. This increased choice means buyers can now take their time to find the right property at the right price, rather than feeling pressured to make quick decisions.
What Does This Mean for Buyers Who Are Also Selling a Home?
From my recent experience, I’ve noticed some interesting trends. Last month, I worked with a family who needed to sell their three-bedroom semi-detached house to upgrade to a larger property. Initially, they were disappointed when they had to reduce their asking price by £15,000 to secure a sale. However, we then used this market knowledge to negotiate £25,000 off their purchase price for their new home, actually leaving them better off overall. This is becoming a common pattern – what you might lose on the sale, you can often make up for in the purchase.
I always reassure my clients about the long-term perspective. When discussing potential price drops of 2-10% in 2023, I share historical data showing the impressive 974% increase in house prices since 1983. Just recently, I helped a couple who were worried about buying in the current market. I showed them how similar dips had occurred before, yet the market had always recovered. The projected 18% growth by 2027 is particularly encouraging and I’ve been using this to help clients make informed decisions about their timing.
Those worrying about losing equity in their homes thanks to predictions of a drop in house prices of between 2% and 10% for 2023 should rest assured that in the long term house prices will recover. Despite a number of economic downturns over the last 40 years, house prices have still soared an impressive 974% overall since 1983. Indeed, house prices are expected to recover in 2024 and grow again by 18% overall by 2027.
So, How Should You Go About Haggling Then?
Based on my daily experience negotiating deals, preparation is absolutely crucial. Last week, I helped a buyer secure a property for £20,000 below asking price because we had all our paperwork ready to go. This included a mortgage agreement in principle, proof of deposit and a solicitor already lined up. The seller chose our offer over a higher one simply because we were better prepared and could move quickly.
I’ve also seen great success with buyers who can be flexible with their moving timeline. Recently, I worked with a client who was willing to move into temporary accommodation to accommodate a seller’s delayed completion date. This flexibility secured them a £15,000 reduction on the asking price, even though they weren’t the highest bidder.
When it comes to research, I always tell my clients to look beyond the asking prices. In one recent case, I helped a buyer analyze sold prices in their target area and discovered that properties were typically selling for 5-8% below asking price. Armed with this information, we made a confident offer that was accepted, saving them significant money.
At The End
When to Walk Away and When to Compromise
Drawing from my years of experience, I’ve learned that walking away can be your strongest negotiating tool. Just last month, I advised a client to walk away from a property when the seller wouldn’t budge on price. Two weeks later, the seller came back accepting our original offer. However, I also remind clients not to let pride get in the way of a good deal. One of my recent clients almost lost their dream home over a £2,000 difference – we had to have a serious conversation about whether that relatively small amount was worth losing a property that met all their needs.
Using Surveys to Your Advantage
Remember, surveyor findings can provide another opportunity for negotiation. In a recent case, we discovered some issues with the roof during the survey, which allowed us to negotiate a further £7,000 reduction to cover the repair costs. This is why I always emphasize that initial offers aren’t set in stone until contracts are exchanged.
