Q&A: BUYING
Q.Dear Camilla, I am thinking about selling my home this year. But is it the right time given that there is both economic and political uncertainty at the moment?
A.There has been a lot of positive press about property prices in recent weeks, which should support the UK housing market.
For example, mortgage lender Nationwide reported a 1.2 per cent rise in house prices in January and said that it expects annual price growth to hit double figures next month for the first time in three years.
House prices are a long way off their October 2008 peak of £186,044 but the average price is now £163,481, up from a low of £147,746 in February last year. The UK is now out of recession and in spite of slow economic growth and nervousness around the general election, UK house prices appear to be on the up.
The same is also true in London – recent research by estate agent Knight Frank showed that luxury home prices in central London rose 11 per cent last month – the fastest annual pace recorded since April 2008.
The London residential property market is expected to remain resilient this year thanks to continuous demand from foreign buyers, a weakness in sterling and a real lack of supply. These factors are not just keeping prices where they are – they are forcing them up.
Q.Dear Camilla, I’m selling my property through an estate agent but I have just had an offer from a private buyer, which sounds too good to be true. How can I make sure that the buyer is serious?
A.If you decide not to sell your property through an estate agent then you will have to do the checks to make sure that the buyer has sufficient funds to make the purchase. One of the reasons that many people instruct and pay an estate agent is that they expect this due diligence, among other things, to be done for them.
There are three key things that you should check: first, can the buyer provide proof of funds? Second, have they already instructed a solicitor? And third, if they are intending to take out a mortgage, is that already in place?
The latter two checks will indicate to you whether the buyer is serious about purchasing the property and should save you from dealing with time-wasters.
Even if you are selling through an estate agent, you should ask whether these checks have been done – there is quite a disparity in the quality of agents so it is by no means guaranteed.
You are certainly not obliged to take the private offer. Certainly, the buyer takes on more risk than the seller – they will have to pay for valuations, mortgages and solicitors while the vendor will incur relatively little financial cost.
However, if you are in a chain, then you need to be sure that the buyer you are dealing with is proceedable. Bear in mind that buyers are not obliged to provide any proof or evidence to the seller that they can make the purchase. Do your due diligence if you don’t want to waste your time.
Camilla Dell is the managing partner at search and acquisition consultancy Black Brick. www.black-brick.com.