Property Market Update – February 2023
By Steve Cook – Partner Clarke Gammon
I’ve lived and breathed the local Surrey and Hampshire property market for more years than I care to admit, having recently celebrated 20 years as a partner at Clarke Gammon, although I started my career in estate agency in 1982.
Over the years, I’ve experienced most property and economic market conditions, from highs and lows of inflation, buyer and seller markets and most types of markets in between. If I’ve learnt one overriding truth, it is that people’s confidence is key.
Confidence is Key
I recently recalled to one of my colleagues that when I purchased my home on Marley Common back in the early 1990s, I needed to borrow £100k, this at a time when mortgage interest rates were around 10% and the average working wage was £12k PA. £100k was an awful lot of money to borrow in those days, this pales into insignificance by today’s standards but then it was a truly scary number.
At that time, the UK property market had just started to recover from the late 1980s downturn caused by the government ending of joint tax relief. Property values were beginning to recover and buyer activity was getting stronger. Following a few tough years in estate agency, it was seeing a resurgence. This gave me the confidence to take on such a high mortgage. Looking back, it was one of the best decisions I’ve made.
Just about everyone that has owned a property for a few years will have similar experiences, and in five or ten years when today’s buyers come to sell, they will wonder what all the fuss was about…
Today’s Local Market
History does have a habit of repeating itself and if any parallels can be drawn from that time, it is that despite the economic climate, mortgage interest rates etc, people will always have the desire or perhaps the need to move home.
I read almost daily in the media how dire the property market is and wonder just where journalists get their information, as it rarely has little bearing of the reality on the ground. Whilst the current property market is certainly not the buyer driven frenzy of 2022, the fallout from the mini-budget bringing a sharp end to those times.
The market recovered fairly quickly and certainly, from the end of last year, the market has gained in confidence. Today it remains at sensible levels with strong buyer activity and a much more realistic approach from motivated property owners looking to sell.
This has been strengthened with more favourable reports of the economic position, inflation showing downward signs and interest rates have begun to stabilise. This along with competition in the mortgage markets has seen some great deals for home movers and first-time buyers alike.
Together the signs are more positive and consequently helps would-be buyers and sellers have the confidence to get moving.
Property prices
The question I’m asked the most frequently asked is, ‘what are property prices doing’ or more pertinently ’has my property gone down in value’, primarily prompted by attention-seeking media headlines.
Without wishing to sound evasive, there cannot be a straightforward answer to these questions. It’s not as simple as comparing the price of a bag of sugar or any commodity. A property is not a commodity, it is often an emotional purchase and each is infinitely variable based on location, size of accommodation and standard of upkeep.
Property cannot easily be pigeonholed by type or indeed value, what determines a property’s value is often what someone is prepared to pay for it. We have all seen property auction shows on television, which demonstrate just how variable property values can be, as it depends on the appetite or desire of the people bidding on the day.
What is critical in a property auction, is the guide price. This is the price the property is advertised at, the price must not be too high to put potential buyers off, it must be realistic enough to encourage significant interest, this strategy will mean that interested parties will attend the auction and start bidding against each other.
Whilst the conventional property market doesn’t work in quite the same way, the strategy is nevertheless similar. Price the property sensibly to ensure buyers see it as good value for money and not overpriced, as this will limit the number of interest buyers and lose out on those initial weeks of marketing and high interest. Price is more critical now than in recent times. Don’t be persuaded to price your home too high, be sensible and remember, once you have sold, this will put you in a strong buying position for your onward purchase.
Ultimately property values always grab media headlines, but for all buyers and sellers who are themselves onward buyers, property values are not really that important. It is the gap between what you sell and buy for is critical.
Put simply, if you agree a sale at 5% less for your current home, you then have an opportunity to buy your new home at 5% less, and as most people trade up in value, in monetary terms you are better off financially…
Considering a move?
If you are thinking of buying or selling your property, or need some help or advice on property related matters, please give me a call at our Liphook office, I’m always happy to help.
If you are thinking of selling your home, please feel free to use our instant online valuation tool, or arrange for us to visit your home to provide you with a more accurate market appraisal.
Steve Cook
Partner Clarke Gammon
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