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Property projects for 2010 - Kate Faulkner, Designs on Property

Should you buy, sell, rent, renovate or build in 2010?

2008 delivered a disastrous year to the property market with funds disappearing, buyers losing all confidence, developers almost going bust and sellers struggling to get viewings let alone sell!
For some, lack of a deposit to buy or unfortunately being temporarily in negative equity may stop some people from moving. However for many, 2010 will bring some clarity to which direction the property market will go. And of course for those that are considering renting, the picture is already clear: most rents are going up!

For self builders and renovators, this year has been one of the best. With land prices dropping, a significant increase in the number of available building plots, great offers and deals on building materials, coupled with the availability of low deposit finance, it’s never been a better time to build or renovate!

So here are my top tips for anyone thinking about carrying out a property project in 2010!

First Time Buyers

If you are looking to buy in the New Year, it’s worth waiting for the first few months as it’s likely more stock will come onto the market to choose from as sellers gain in confidence and the number of people needing to sell post Xmas starts to rise.

However, be aware that some predictions suggest the market may fall for the second half of 2010 as unemployment (particularly from government cuts) causes a rise in repossessions and a fall in the numbers having the confidence to buy.

Fairly priced properties in good areas are likely to continue to sell well, so make sure your finances are in order before you make an offer, and choose a ‘no sale, no fee’ conveyancing company that ideally offers fixed prices to ensure if your purchase falls through you don’t pay a big legal fee.

Finally, buy on the assumption prices won’t rise for a number of years – our bad debt is likely to hold back finance for sometime so people will continue to find it tough to borrow money. Higher unemployment and a lack of wage rises are likely to hold back buyers’ ability to increase their offers over the coming years.

Buyers Trading Up

For those that are trading up, it’s a good time to do so. Most well priced properties in good areas are selling in around 8 weeks following 10-12 viewings, so unlike 2008 and the first part of 2009 when it was tough to sell a home, the early part of 2010 will be ideal.

Watch out for more competition from other sellers in March/April time, as people’s confidence (and need) to move grows.

From a financial perspective, most lenders seem to be giving the best deals to buyers with 25%-40% deposits so do try to save up as much as you can as it should save you in the long run. Take advice from a fully qualified and regulated mortgage broker or independent financial advisor that can search the ‘whole of market’ for you ie not tied to any particular lenders or products. You will also need to check out bank and building society deals though, as some of them won’t sell via third parties any more.

Finally, DON’T let poorly researched media reports of ‘price rises’ trick you into putting your prices up or over pricing in the hope someone will pay. Better to price fairly and get two people competing to push the price up than price too high, get few viewings and then having to reduce your price.

Buyers Trading Down

2008 and the start of 2009 wasn’t the best of times to sell up and buy something smaller, but now it’s definitely worth considering. This is particularly the case if you have a good sized property in a popular location which has good schools, as most of these areas are typically short of well proportioned family homes with a decent garden.

Make sure you choose your agent carefully. You don’t want the one that charges the cheapest commission or the one that quotes the highest value. The first is likely to give a poor service and not have the buyers for your property type, the second will come back to you after a few weeks of no viewings and suggest you drop the price!

Ideally make sure you choose a good agent where the manager/owner has worked in the area for 10/20 years (the company might be new, but as long as the manager is experienced they typically run a good office). Ask them if they have anyone that specifically works on sales progression (ie they’ll chase your buyer and seller for you) as this will take away alot of the stress between offer stage and completion.

Finally, if you have children that live locally – have you thought about house swapping if they live in something smaller? It might be the perfect way to move for everyone! You would need to talk to a legal company, but if you need help with this, contact us on 0845 838 1763 or email enquiries@designsonproperty.co.uk and we’ll send you some more information.

Sellers

If you are thinking of selling in the current market, then make sure you market your property to the right audience:

1. Don’t leave any DIY unfinished. Bare wires and cracks put buyers off.

2. Make sure you sell the home either as a renovation project, somewhere anyone can move into tomorrow and do nothing, or as a property that just needs a bit of a paint job.

3. Don’t over price your property, better to price fairly and have two people competing to buy.

Once your property is looking good, make sure you choose your agent carefully – find three that have sold similar properties to yours ie target agents with sold boards on properties and streets around you. Those that are just advertising properties and never seem to sell them often over price, avoid these agents like the plague!

Don’t forget that it’s not just agents that sell property; the auction markets can pick up pretty good prices and secure you a buyer on auction day that hands over a deposit there and then, so make sure you check out this as a possibility. Auction houses in October managed to sell property for more money than they did last year, so it doesn’t necessarily mean you won’t achieve a really good price.

Renters

Most areas are already experiencing the first shortage of rental properties since September 2008, so it’s essential if you are looking to rent to try and sign a 12 month contract with a six month break clause. This way you can hopefully tie in the rental price now before prices are really likely to rise in 2010.

Don’t forget that letting agents (unlike estate agents now) are unregulated. Some are even walking off with your deposit and your rental money. To avoid the rogue or financially distressed agents, make sure you use a letting agent that is part of www.nalscheme.gov.uk or part of ARLA. All affiliated agents HAVE to have insurance to protect both tenants and landlords from any misappropriation of funds or the agent going bust.

Renovators

If you are planning to extend, update or adapt your home, then now is a great time to get things done. Don’t try and rush into a new kitchen or bathroom in time for Christmas, it’s unlikely to get done if you haven’t bought/ordered or organised a builder or plumber yet!

2010 is likely to be a great year for renovating properties and this week we are celebrating ‘Maintenance Week’ for your home, so before you go ahead and order a fancy new kitchen or spend money on a loft room, make sure your home is waterproof ie no tiles missing and the guttering and drain pipes are free of vegetation and not cracked or leaking at all.

Good tradesmen will prove harder to find post Christmas as people who haven’t yet moved will want work done, and those that prefer to improve rather than move, will get on with projects once the Spring comes. Developers are busy buying land, so are likely to soak up more builders and contractors during 2010 so it’s essential to try and get the work done as fast as possible.

Self Builders and Developers

2009 and 2010 are one of the best times to buy land and build we’ve seen in decades. Finance is available with smaller deposits of around 10% and land is a plenty, with prices falling by 7% over the year (source: www.plotsearch.co.uk ). Good quality builders and fantastic deals on conservatories, kitchens, bedrooms (and bricks!) are likely to be available at the start of the year, but depending on how well our recovery from the recession goes, could be harder to find in the latter part of 2010. So if you can, start planning and looking for a site for your new land – and don’t forget, buy land with outline or detailed planning permission and then design and build your fabulous new home in 2010!

Kate Faulkner

Kate Faulkner is MD of www.designsonproperty.co.uk and is author of six property books including four for Which? If you have any questions about property, Kate will aim to give you an independent answer for free.

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