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House prices have increased recently, but now market analysts are warning they could start to drop again as interest rates rise. Market uncertainty following chancellor Kwasi Kwarteng's mini-budget on 23rd September has caused banks and building societies to pull mortgage deals and raise product prices as inflation soars.
Lenders such as Virgin Money, Halifax and Skipton have taken the drastic step after economists warned the base rate could rocket to 6% in spring 2023, after the pound plummeted following the mini-budget announcement.
The Prime Minister and the chancellor announced an unexpected U-turn on 3rd October, reversing the unpopular plans to scrap the top tax rate, after bowing to pressure from ministers and financial institutions.
However, Labour ministers say the reversal is "too late" and only time will tell whether the economy will start to recover from the recent turmoil.
Factors to consider when moving house
Should potential sellers bide their time when it comes to moving, in the hope the market will calm down, or should they go now, in case prices don't stabilise in the near future? According to consumer research, homeowners are divided on whether this is a good time to sell, with 51% believing the time is right.
While interest rates are relatively low, more prospective buyers are tempted to enter the market. This benefits sellers, as it can lead to bidding wars and drive home prices up, affording a better chance of selling for a significant profit. When the housing supply is low, properties on the market tend to sell much quicker.
If you're looking to downsize to a more budget-friendly home, this could be a good time to sell. It might be a necessity for people in an older home that's now too large, as there might be more repairs than you can afford to shoulder.
Personal considerations can include wanting a bungalow or ground-floor flat if your house has steep stairs that you're now struggling to manage. If you're planning to relocate or want to move to a more suitable retirement property, this could be a good time to make the move.
What are the disadvantages to moving house?
Even amid a favourable sellers' market, there are reasons why it may be more sensible to delay putting your house on the market. If interest rates start rising, as analysts suggest, there will be fewer buyers who can afford to pay the price you want. If you can’t maximise your price, it might be better to delay selling.
It could also be a good idea to wait if you're hoping to upsize, as the newer, bigger home you want might be beyond your budget in the current market. Always take the time to work out your finances accurately to ensure your budget can accommodate the type of property you need.
If you've already refinanced your existing mortgage, it might be advisable to wait before trying to sell your home. It might not make financial sense to sell right now - you could lose money if you do so.
Whatever you're planning, always have a solid gameplan. It makes no sense to sell if you're not sure what your master plan is and you're simply hoping to take advantage of the market.
How to move house successfully
If you decide to sell and succeed in doing so, the process of moving house need not be traumatic. Precision planning in advance will ensure the day of the move goes as smoothly as possible. It's best to start organising transport with a removal firm about eight weeks in advance. Don't leave it too late, or you may find they're booked up on the day of your move.
Organise help from family and friends where possible, although don't expect them to help just because they are your loved ones. Some people have busy lives and may not have time to help with such a big task.
If people do agree to help, whether it's packing boxes, looking after your kids or pets for the day, or transporting smaller, fragile items for you, let them know how much you appreciate them. Don't take it for granted they'll be free all day, as people have other things to do. Make plans for the move in advance, around the help you have available.
When packing your belongings, use easily movable storage solutions, such as stacking plastic containers, as they will be sturdy enough to protect items in transit and will take up less space in the removals van. You can also reuse them to organise the home, garage, garden or shed once you are a little more settled.
Make sure you know where items such as your kettle, microwave oven, crockery and cutlery are being stored so you can unpack them easily once you've finished the move. While you may not feel like unpacking everything on your first night, having a cup of tea and something to eat will be high on your list of priorities.
According to government statistics, house sales in the UK were up by 9.7% in August 2022, compared with August 2021. The number of sales had increased by 4.4% between July and August 2022. The average house price in the UK was £286,397 - up by 7.8% compared with the same period in 2021.
This suggests it is currently a sellers' market, according to market analysts. However, some people, especially first-time buyers, are hoping house prices will start to fall - something that is looking increasingly likely, according to the experts.
The outlook might change after the chancellor's latest forecast for the economy and public finances, which is due to be released on Wednesday 23rd November.