October Newsletter - The importance of setting a realistic asking price 

October Newsletter - The importance of setting a realistic asking price 


In this month's edition, we start with a look at the importance of setting a realistic asking price when selling a property, and how getting this key step wrong can cause problems for sellers. 

Elsewhere, we take a look at whether the buy-to-let market remains a viable investment for landlords, the Conservative government as extended permission rights for homeowners to extend their property and finally, we offer our top tips for selling your home as the days begin to get shorter. 


Homeowners' planning permission rights to be extended

 
At the annual Conservatives’ conference this month, Chancellor Sajid Javid and Housing Secretary Robert Jenrick announced plans to allow homeowners to add two-storey extensions without the need for planning permission. This would tie-in with legislation brought in earlier in the year which allows homeowners to extend on a single storey without planning permission.

Sally Tagg, the Managing Director at Foxley Tagg has concerns over the plans with regards to the effect on communities if there is little in terms of restrictions, which could result in inconsistent building design.

“Because the announcement is not formal yet it is very unclear about what it will comprise. Conceptually, rolling back further on permitted development should be treated with caution and concern in terms of the potential impact it may have in design terms which is an important plank of place making,” said Tagg.

Tagg’s concerns stem from the fact that although extensions will be required to comply with current building regulations, neighbours will no longer be able to formally object.

The Housing Secretary had this to say on the proposals: “All too often the planning system proves complicated, outdated and bureaucratic and is too complex and costly for people and small businesses to navigate. This is a barrier to building the homes that we need…

“I want to give families the freedom they need to expand their homes and ensure small developers get a fair chance to succeed. Our vision for reforming the planning system will speed up and simplify the process, while ensuring that communities still retain a say over their future.”



Is the buy-to-let market still viable for landlords?

 
The buy-to-let market has had somewhat of a difficult time over the past few years due to changes in government legislation and taxation. Since July this year, however, the number of buy-to-let mortgages being approved has risen considerably and is proving that there is life in the market for those looking to invest.

With competitive mortgage rates available, especially if a larger deposit has been accrued, anybody who has the desire to become a landlord now has the opportunity to do so. A new report by HomeLet showing that the average rent around the UK has reached a record high of £970 per month demonstrates that the potential to reap rewards through buy-to-let is exceptional.

HomeLet data shows that rents have increased in every single region of the United Kingdom over the past twelve months, up to 3.5% greater than at the same point in 2018. For those looking to invest, this presents tremendous opportunity to be able to invest locally and see the benefits.
 

Biggest annual increases in average rents

Region

August 2018

August 2019

Annual Change

London

£1,632

£1,689

+3.5%

North West

£717

£741

+3.3%

South West

£826

£852

+3.1%

 
In terms of rental yields, we are also seeing record highs in terms of the average yield that landlords are reaping, with the average now reaching 4.5%, up from last year and the highest in three years. For those looking to maximise their yields, there is a growing trend towards Houses of Multiple Occupancy, or HMOS, as they tend to provide a yield approximately 20% higher than a typical rental property.
 

Which region provides the best rental yield?
North West - 6.20%
Yorkshire & The Humber - 5.90%
East Midlands - 5.40%
Scotland - 5.30%
West Midlands - 5.10%
North East - 5.10%
South West - 4.40%
Wales - 4.20%
East of England - 4.10%
London - 4.10%
South East - 4.00%
National average - 4.50%

 



The importance of setting a realistic asking price

 
Recent analysis from comparison site Zoopla has shown the benefits that are reaped when a property is priced correctly rather than over-ambitiously, with overvalued properties taking up to two months longer to sell.

In addition to a longer sale period for properties which are overvalued, the research also found that by dropping the price in order to attract buyers, these properties also achieve an average asking price of £12,000 less than their more accurately valued counterparts.

“Our research highlights the importance of accurate pricing and reveals the areas where there is the healthiest alignment between a seller’s expectations and what a buyer is willing to pay for a property,” said Charlie Bryant, managing director of Zoopla.

“When a home is valued too ambitiously at the start, or simply overpriced, the sales process can be derailed. Homes can languish on the market for much longer than they should and the vendor loses control of the sale, often leading to price reductions,” he pointed out.

“Agents in Salford, Driffield and Dronfield stood out in our report in aligning their vendor expectations with the realities of the market, and what a potential buyer is willing to pay for that particular house, in that particular location.

“The English and Welsh average sold price, which amounts to 96.3% of the asking price, indicates a market realism, and moreover a market that is transacting good values, despite wider macro-economic and political concerns,” he added.

This research shows the important part which an estate agent plays in those initial meetings, with an over-valuation extremely attractive at first, but damaging in the long-run. If you are thinking of selling your property, then complete your own research so that you can have open and honest conversations with your agent in order to list at a realistic value.



Tips for selling your property as the days get shorter

 
As the days get shorter, it is more important than ever to present your property in an appealing manner if you are going to attract potential buyers. With that in mind, we have put together some season-specific advice to help you find a buyer…

Let in the light
Never is it more important in the year to keep your rooms bright and airy than during the change between seasons. This is because of how quickly the levels of light fluctuate, turning your lovely property into a less-appealing version of itself, with dark rooms and corners. To avoid this, use uplighters to brighten up your rooms during viewings – this type of lighting can be easily placed into corners or areas which may appear darker. Furthermore, blinds and curtains should be drawn back to allow plenty of natural light and don’t forget to turn any lights on in cupboards etc. to create multiple sources of brightness.

Keep paths clear
During this time of year, leaves may start to fall from the trees leaving debris around your property. Ensure that your kerb appeal is kept to its maximum by clearing away any errand plants and debris from your property, especially on the path to your front door where potential buyers will most certainly be surveying. If you have the time, consider tidying up your flower beds and removing and shrubbery which may not be looking quite as lovely as during the summer months.

Clean, clean and clean again
Of course, presenting your property in a clean and tidy state is a given, but it’s also worth considering any other areas that you can spruce up in order to maximise the available light. Clean your windows regularly to ensure that they sparkle for prospective buyers and let in as much natural light as possible (this will also help with the aforementioned kerb appeal). Clean your front door so that it looks at its best – many of us will have white UPVC doors to match double glazed windows, and if this is the case then use some bleach to rejuvenate it.

Increase the pressure
You want your property to seem cosy and inviting, and the drop in temperature gives you the perfect chance to make your home comfortable and welcoming. Turn the thermostat up so that during viewings your property is warm and incentivises viewers to really take their time looking around before they brave the cold weather once more. If you have a fireplace, think about lighting it up or at the very least light some candles.