My house isn’t selling: Should I reduce the asking price?


I’m selling my two-bedroom flat as I can now afford to trade up to a house.

I have seen some properties I like, but am wary of making an offer as I am struggling to sell my flat.

Most of the people viewing it are first-time buyers and I think they are feeling nervous about the economy, and can no longer borrow as much as they expected due to rising mortgage rates.

Should I slash the price, hold out for the right buyer, or shelve my plans to move until things are more certain?

Caught between a rock and a hard place: Our reader can’t decide whether they should lower their asking price or stay put in the current market

Ed Magnus of This is Money replies: The home moving process is a stressful one at the best of times. You need to find and agree a price on the property you want to purchase whilst also finding a buyer who wants to buy your current home.

If either the person you are buying from or the person you are selling to, changes their mind or pulls out at any stage, it can all end in bitter disappointment.

Then there are all the legal, mortgage and surveying related issues – and associated costs – that can arise throughout the process.

It all results in a home moving process that takes months to complete, often riddled with anxiety and sleepless nights.

At present, you are probably correct in thinking that first-time buyers may be feeling a little nervous.

They are facing some of the highest mortgage rates recorded since the financial crisis, combined with an expectation that house prices will fall in the near future.

House prices dropped 0.4 per cent in October, the third drop in the last four months, according to Halifax’s latest house price index.

If you are finding it hard to sell your flat, the chances are you’ll need to lower the price to attract buyers – but this doesn’t mean you can’t try and haggle the difference off the home you are trying to buy.

After all, if you’re struggling to find a buyer, the chances are others in your area may be as well.

For further advice, we spoke to Angela Kerr, director at HomeOwners Alliance, Nicky Stevenson, managing director at estate agent group Fine & Country, Matthew Thompson, head of sales at Chestertons estate agents and Iain McKenzie, chief executive of The Guild of Property Professionals.

Is now a bad time to move house?

Angela Kerr replies: It’s sensible to hold off making an offer on a new property until you’ve had an offer on yours.

It’s currently taking on average 37 days to find a buyer, so do give it some time.

You’re right that some buyers will be feeling more uncertain. The former Chancellor’s Mini Budget in September created chaos.

First-time buyer drought? Some aspiring first-time buyers will be putting their plans on hold until mortgage rates come down, or at least until the outlook for house prices improves

First-time buyer drought? Some aspiring first-time buyers will be putting their plans on hold until mortgage rates come down, or at least until the outlook for house prices improves

Zoopla’s House Price Index shows demand is down by a third since then. But there are signs things are now settling as some experts predict mortgage rates will stabilise at 4.75 per cent rather than hitting 6 per cent.

While not as eye-watering a rise, higher rates do mean new borrowers will find they can’t borrow as much and therefore make lower offers.

Should they reduce the asking price?

Angela Kerr replies: Before you act, talk it over with your estate agent. Get feedback about the viewings and their view of the local market.

Put yourself in the shoes of buyers and look on Rightmove and Zoopla at properties like yours.

Is your flat priced similarly? Is it as well presented as other homes? How much of a hurry are you in to move? Are others reducing their price and selling? 

All of these will inform your decision on whether, and by how much, to reduce the price.

Fall: The average UK house price was £292,598 in October, according to Halifax, down from £293,664 the month before

Fall: The average UK house price was £292,598 in October, according to Halifax, down from £293,664 the month before

Iain McKenzie replies: Depending on what’s happening locally, and your financial situation, what you feel is a discount may not even be one.

Sellers often feel prices are going backwards if they’ve been unable to achieve the valuation their agent encouraged them to list at. Have a look at the prices similar local properties have sold at recently.

There can be a big difference between the marketing price you saw on the property portals and the valuations homes are actually achieving when contracts are exchanged.

You may find your reduced sale price still compares favourably and, so long as the discount doesn’t make your purchase unaffordable, you will then feel more confident about proceeding.

And it will cost you nothing to find out if a modest reduction sparks the kind of interest from buyers that you need.

Should they postpone their move altogether?

Angela Kerr replies: On your suggestion you wait until things are more certain, just be aware there is never really an ideal time to move home.

We had Brexit, then the pandemic, and now the cost of living crisis – but nevertheless people still need and want to move home.

 A home is for living in, and if your personal circumstances dictate that a bigger home would benefit you – and your finances allow – then now is as good a time as any

A home is for living in, and if your personal circumstances dictate that a bigger home would benefit you – and your finances allow – then now is as good a time as any.

House prices are expected to drop next year, but as you’re buying and selling at the same time the impact is likely to be relative: You might sell for less, but you should aim to negotiate a similar percentage off your onward purchase.

Matthew Thompson replies: Shelving your plans or slashing your asking price should only be considered once all options have been fully explored.

Bear in mind that if you do postpone your sale and confidence comes back to the market during that time, prices are likely to increase and you could be priced out.

I would suggest reviewing how long the property has been on the market for, how many viewings have been conducted and what the feedback has been.

To give your sale plans another boost, find out what your agent is doing to reassure first-time buyers that now is a good time to buy.

In the majority of cases it still makes more financial sense to buy than it does to rent, but the agent should act on your behalf to secure the sale.

Although the majority of your viewings are from first-time buyers, what else could the agent do to attract other buyer demographics?

Should they sell before they buy?

Nicky Stevenson replies: This is a stressful time for homeowners looking to trade up. Heightened volatility in the mortgage market is causing many to put their plans on hold.

One option is to sell your flat first and either rent or stay with family until you find a house that meets your needs.

That might save you the heartache of missing out on your dream home after you’ve already had an offer accepted, but there’s obviously a significant cost attached.

Haggle: If you sell your property for lower than you were hoping then try and buy a property for less than expected

Haggle: If you sell your property for lower than you were hoping then try and buy a property for less than expected

An extra word of warning for those thinking of going back to renting while buying — competition in the private rental sector is fierce right now and rents are climbing all the time. Landlords can pick and choose who they want, and you might find yourself being overlooked.

It’s also likely your landlord will want you to sign a one-year lease, and you risk losing your deposit if you complete a purchase and decide to leave early.

Any final tips?

Iain McKenzie replies: The property industry is currently in a state of flux and that means it’s even more important to focus on the house price differential — in other words, the difference between the price you pay and the price you get for your current property. This is the crucial factor in this scenario.

It can be unhelpful to think about your current flat as having earned you a tidy profit since you bought it because it’s all relative. Don’t get hung up on prices.

If you shake off this way of thinking, you will find it much easier to make good decisions with a clear head.

Some parts of the market are consolidating at the moment, so if you can find a buyer for your flat by dropping the price, but make that money back by securing a discount on your next property, then it’s clearly the ideal outcome.

For example, reduce your asking price and secure the same discount on the house you want to buy and you’re all square. You will even be slightly better off because you’ll pay less stamp duty on your purchase.

What to do if you need a mortgage 

Borrowers who need to find a mortgage because their current fixed rate deal is coming to an end, or because they have agreed a house purchase, have been urged to act but not to panic.

Banks and building societies are still lending and mortgages are still on offer with applications being accepted. 

Rates are changing rapidly, however, and there is no guarantee that deals will last and not be replaced with mortgages charging higher rates. 

This is Money’s best mortgage rates calculator powered by L&C can show you deals that match your mortgage and property value

What if I need to remortgage? 

Borrowers should compare rates and speak to a mortgage broker and be prepared to act to secure a rate. 

Anyone with a fixed rate deal ending within the next six to nine months, should look into how much it would cost them to remortgage now – and consider locking into a new deal. 

Most mortgage deals allow fees to be added the loan and they are then only charged when it is taken out. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I am buying a home? 

Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. 

Home buyers should beware overstretching themselves and be prepared for the possibility that house prices may fall from their current high levels, due to  higher mortgage rates limiting people’s borrowing ability.

How to compare mortgage costs 

The best way to compare mortgage costs and find the right deal for you is to speak to a good broker.

You can use our best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.

Be aware that rates can change quickly, however, and so the advice is that if you need a mortgage to compare rates and then speak to a broker as soon as possible, so they can help you find the right mortgage for you.

> Check the best fixed rate mortgages you could apply for 

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