11 January 2019
Although our industry is relatively modern, the reasons why homeowners look for a quick house sale rarely change.
Broken chains, rental property disposals, clearing debts or simply not wanting to deal with estate agencies are some of the motives – but there are many more. With one in three sales open market sales falling through these days, more homeowners are warming to the benefits offered by companies like Property Solvers.
At the same time, the sector still finds itself continually responding to the negative feedback that we’re capitalising on people’s vulnerable situations, typically by making below market value offers. Admittedly, as with any area of business, there are ‘bad apples’, but we continue strongly argue that the truth is quite the opposite.
Decent quick house sale companies will be taking the time to explore people’s options. Of course, it makes little sense for a vendor to accept a cash offer when adjusting the price, swapping estate agency or restructuring the underlying mortgage debt are often better solutions.
However, in many situations, we’re simply buying the properties that struggle to sell on the open market. Perhaps there are physical and legal defects for instance. Above all, our clients like the idea of having more certainty of dealing with a guaranteed cash buyer without estate agency or solicitor fees.
Ironically, it’s also important to note that cash sales occur across industry on a daily basis – not only at auction houses but at high street and online estate agencies.
Bearing this in mind, it’s worth exploring a few areas we feel will be concerns amongst homeowners looking for a fast sale as we move through 2019…
House Prices in 2019
If you’re looking to sell up and worried about the direction of the market, we would always suggest avoiding most of the media scaremongering headlines. The truth is that nobody, even the experts, really knows what will happen.
Our advice is always to look at things as objectively as possible in your own local market whilst keeping an eye out on the broader (national) trends. For example, if you’re starting to see more ‘for sale’ than ‘sold’ signs and other indications of a slower market, you may need to adjust your asking price.
Much will also depend on the part of the country your property is located. Growing house prices over the last 10 years or so in London and South East has meant that getting on the ladder is practically impossible for many – particularly the young. However, in many parts of the Midlands and the North, prices have only recently recovered to where they were pre-credit crunch. Homes are therefore generally more affordable in these areas.
The Brexit Effect on House Prices
We’ve noticed that people’s thoughts on the direction of house prices post-Brexit can often be shaped by where they stand on the debate. Many predictions are often based on speculation and sentiment, rather than the real facts.
However, it’s fair to assume that if the country gets a ‘bad’ or ‘no’ deal Brexit, the chances of an economic downturn are higher. In this scenario, it’s quite possible that the pound’s value will fall and fuel inflation.
The average level of disposable income then potentially falls, unemployment rises, and the Bank of England is forced to raise interest rates. Less people will be looking to buy and those on variable or tracker mortgage rates may end up struggling. At the opposite end of the scale, others believe that things will not be as serious as the ‘doomsayers’ believe, and the housing market will weather the storm. Or maybe we’ll be somewhere in between when all is said and done.
Regardless of what happens, it’s important to remember that the UK housing market has and always will pass through cycles (Brexit or no Brexit). If a downturn does occur, and you end up having to drop your price, remember that any new property you buy will be lower in price too. Thinking of it as a rising and falling tide that homes in your local area float on.
Choppy Waters in the Buy-to-Let Sector
As outlined in our previous post for the NAPB blog (10 tips on selling your rented property), the effects of Section 24 of the Finance (No. 2) Act 2015 combined with unprecedented top-down financial and regulatory control is leading to more landlords exiting the buy-to-let sector.
With the amount of mortgage interest tax-deductible against annual rental revenues being further restricted – the above trends are likely to continue into 2019 and beyond.
However, it’s certainly worth speaking with suitably qualified accountant and engaging in some detailed analysis of your current and future tax position. For example, if you’re a lower-rate taxpayer and will remain that way (even when the full force of Section 24 is in place in 2020/21), then your position moving forward may not be as perilous.
Those who are lowly geared across their portfolios should also be ok. Yet, it’s worth noting that some lower rate tax payers are being unintentionally pushed into the higher rate bracket.
Some Basic Checks When Using a Sell House Fast Company
If you’re weighing up whether to use a quick house sale company, it’s worth remembering that some of the concerns outlined above are real. Our sector is not regulated in the same way as financial services and there are a number of potential pitfalls.
It’s worth going through the following list to make sure you don’t end up taking a wrong turning (see some more complete checks here):
- Check that the company is a member of The Property Ombudsman (TPOS) (a prerequisite to joining the National Association of Property Buyers). At Property Solvers, we also ensure our clients are protected by Anti-Money Laundering (AML) regulations and we are signed up to Trading Standards and the National Landlords Association (NLA);
- Before any firm discusses a quick sale with you, make sure they go through all your options;
- Get the company registration number (it should be on the website) and check them out via Companies House. The company should not dormant, in liquidation or dissolved. Also check that the company has a legitimate office address;
- Use services like Experian and Check My File to investigate the directors and/or individuals buying your property;
- Check out the fast sale company’s social media profiles (mainly Twitter and Facebook);
- Check out the company’s reviews (Google or otherwise).
- Ask if it’s possible to speak to previous customers;
- Check that the company genuinely has the money to buy (proof of funds). They should be able to send you bank statements or a solicitor’s letter;
- Make sure the company will work to your timeframes;
- Ensure that the price will not be dropped at the last minute, for example just before exchange where you might not have any other choice.
Above all, remember that you are in the driver’s seat. You should only move forward with any form of quick sale when you are 100% certain and comfortable.
Best of luck with the sale!
Ruban Selvanayagam and James Durr are co-founders of the hybrid estate agency Property Solvers that offers quick cash house sale and express estate agency services across the UK.
This content has been provided to us by the writer. Whilst believed to be factually correct, we cannot accept responsibility for content contained within it.