In what’s set to be the busiest housing market year since 2007, with reduced housing stock available and the search for more space driving up demand, buyers are finding themselves in one of the most competitive markets in years.
We speak to John Ennis, Foxtons’ Managing Director of New Homes & Central London, and Oliver Blake, Managing Director for Your Move and Reeds Rains estate agents, to find out their top tips for making sure your offer is the one that’s accepted.
In the capital, Ennis has seen a big shift from central London to zones three to six among buyers.
“Rather than worrying about cramming onto the tube to get to work on time, buyers were looking for good coffee shops, nice places to go for a walk and were moving to places they enjoyed spending time in,” he says. “People were choosing life, rather than work, and thinking: ‘What do I enjoy doing?’
“They were realising all of the things they had compromised on and the speed of the wheel on the rat race slowed down,” says Ennis.
But now the market’s picking back up in central and Ennis is noticing a shift: “People are wanting to be out and about. The tubes are getting busier, central London is getting a buzz about it and we’re starting to hear people saying: ‘I don’t want to have my Christmas dinner in the place I’ve been working all year’.
“People want to be out and about, enjoying the restaurants, theatres, parks and all of the wonderful things London has to offer.”
Meanwhile, at Reeds Rains, which has branches across the country, Blake has seen buyer appetite severely outstripping supply: “Demand for property is very strong at the moment and yet we’re seeing many ‘would be’ sellers sitting tight before putting their property on the market – the intention being to only make a move once they find a new home.
“Yet, as more people do this, there becomes fewer properties on the market to choose from.”
So what’s their advice for buyers trying to secure their next property in such a competitive market? Here Ennis and Blake share their top tips.
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In a busy buying market, how can you put yourself ahead of the pack as a buyer?
“If you’re interested, it’s probably best to be on the market yourself,” says Ennis.
Blake agrees and says having no property to sell at all can actually be an advantage when it comes to buying: “If you do sell without a property to buy, there are solutions, including delaying completion with the pre-agreement of the buyer, temporarily renting or moving in with friends or family until your dream home arrives.”
Do your research first and really know what you want
“Get onto sites like Zoopla and start getting the feed through,” says Ennis. “Seventy to eighty percent of our leads come from aggregators.
“Narrow down the wishlist of what it is you’re really after, so that you don’t have to see 20 properties, you can just see five or six.
“And remember you can change things: you can put in new lights, change the flooring and spruce up the garden, so keep an open mind.”
Make sure you do your homework on the location and surrounding area too, says Blake. “It can demonstrate your appreciation of the property and its surroundings to the agent and seller - and can help you to work out what questions to ask, making that in-person viewing more productive.”
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Get your finances in order
“Make sure you have a good deposit,” says Ennis. “Because that will help to open up the best mortgage products.
“If a seller has two bidders and one has a 20% cash deposit while the other has a 30% cash deposit, they may choose to go with someone who is less exposed financially.
“If you’re able to put in a 20% deposit, the rates are unbelievable and the range of products available is huge."
Blake adds that buyers who have secured a mortgage agreement in principle, or AIP, are usually considered more serious buyers and can be favoured by sellers. “The perception being that they are in a better position to proceed and less likely to pull out,” he says.
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Get a good broker early in the process
“The value of a whole market broker has never been better, because they have access to so many products and they can find a lender for you,” says Ennis.
“They’ll tell you what you need to do to improve your credit score (if, for example, you’ve got a bit of debt). And if you’re a first time buyer, lots of sellers will take a 10% deposit, so there’s a lender out there for everyone.
“Be careful going directly to a bank, it’s usually best to go via a broker. Some people earn their money in different ways: for example, if you’re self-employed, on temporary contracts or if a lot of your income comes from big bonuses, it can be harder to prove your income.
“And we’re seeing lots of different sources of income for buying property: stocks, shares, crypto currency, family money, where grandparents have left something for their grandchildren. Lots of people are coming into cash through different ways. And some banks don’t like that. So it can be better to go via a broker.”
Banks are risk averse
“One of the biggest obstacles at the moment is down-valuations,” says Ennis.
“Lenders are always cautious about paying too much. And their surveyors don’t want to see ‘record prices’, they want steady. They’re looking for a little moderation.
“Lenders offering 10% lower than the asking price is very common, but it’s always been around. So be ready to change your loan-to-value amount. You can still pay the asking amount, but increase your cash deposit.”
For example, if a property costs £310,000 and you have a £60,000 deposit, but the bank says the property is only worth £300,000, you may need to increase that deposit to £70,000 to secure the sale.
“Be prepared to put in a little bit more cash and be a bit tougher. Because by the time you move in, it’s probably going to be worth £310,000 anyway,” says Ennis.
What’s the best way to pitch yourself to a seller?
“Lots of vendors are interested in the romance of selling to someone who was like them five or ten years ago,” says Ennis. “They may see couples who are coming out of rented accommodation, where they’ve had a child or two, and they think: ‘That was us a few years back’.
“There’s a big human element to being a successful buyer and we relish in finding that. We love to find out as much as we can about the applicant for the seller, so that we can tell their story.”
So explain who you are to an agent and tell them your reasons for moving, that will help them to portray you in the best possible light to the seller.
Showing that you’re in a good position financially is vital too, says Blake: “It’s important for the buyer to highlight the strong position they’re in and why they’re the ideal purchaser.
“Highlight your knowledge of the area and stress how the property will meet your dreams or aspirations (such as the need for more space, a garden, or to be nearer to a good school for your growing family).
“The seller will also often want their property to go to someone who’ll care for it as much as they have, so it might also be good to provide some reassurance of this directly, or via the agent. It’s not necessarily a good idea to openly discuss how you might want to change the property.”
Toughen up
“Be ready for obstacles,” says Ennis. “The conveyancing process can be slow and it can take between 10-16 weeks to get from an offer to the point of exchange. So don’t give notice to your landlord too quickly."
Get a really good lawyer
“Look at getting a locally-based lawyer,” says Ennis. “For example in London, you can get quirky freeholds with no sublet clauses or no wooden floorboard clauses.
“A London-based lawyer knows all about these sorts of things and says ‘We’ve got this, don’t worry!’ They know the loopholes and how to work around them. A non-locally based lawyer might be thrown by things like that.”
Blake agrees: “Have a good solicitor lined up ready to support you. Seek advance recommendations from friends or family – or get advice from your estate agent - to help you choose one. It could speed up the process further. Another good sign for the seller.
“Keeping track of emails, phone calls and any documentation or actions that are needed is then really important – the same applies for sellers – because delays can occur and can frustrate the parties’ involved or even lead to them changing their minds, mid-transaction.”
Is it best to be chain free?
“Of course that’s better,” says Ennis. “We’re asking our buyers, ‘Would you be prepared to break the chain?’
“The worst thing someone can do is find the home of their dreams and then be in a panic to sell. It means they can end up taking £20K less than the property is worth because they’re in a rush.
“And some people don’t mind chains, it gives them motivation to perform, for example if their kids have to be in a certain school by September.
“Others are letting their property out via let-to-buy. They take a deposit out of their existing home and go on to buy something else without being in a chain.
“There are also good schemes available out there for first time buyers, including shared ownership and First Homes.”
Which first time buyer scheme is right for you?
Finally, keep an open mind
“Applicant mobility has never been greater,” says Ennis. “In London, people are prepared to move three to four tube stops along or three to four postcodes away from where they currently live to find what they really want.
“We ask people: where do you work? Where do you play? It’s worth considering areas you may not have thought of initially to get that extra bedroom or garden.”
So what’s the ideal buyer profile?
The best buyers have:
Sold their home or are chain-free
Instructed a mortgage broker and solicitor
Got their paperwork in order
Have a good cash deposit
Done all the relevant checks
And pitched themselves well to the seller
“They’ve done their research and they’re ready to strike,” says Ennis.
How Zoopla can help
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