Prices may be falling and mortgage lenders nervous – but house hunters are still looking to move. Local experts take a look at the Dorset housing market in 2023
Mortgage rates have risen to levels that were unimaginable just 12 months ago, a cost-of-living crisis rages on, and there is a widespread belief that house prices will continue to fall.
It’s worth pointing out that mortgage rates have been falling since they peaked in October (though staying much higher than for many years). The top five-year fixes come in just under 4.5 per cent now – compared with 2.5 per cent a year ago.
Sellers may have to accept that buyers simply cannot afford to pay 2022 prices for their home in 2023, but the flip side of that is that their own new home should be cheaper, too.
Spring is traditionally the best time to sell your house – but if that’s going to be you in 2023, then right now is the time to start thinking about it.
If you’re a seller, then perhaps start considering getting your house on the market to get ahead of the spring competition. But it’s a big decision – and with the economy in turmoil, is now a good time? Is the market even moving at the moment? Or is it still moving too fast?
Fear not – we’ve rounded up some of the most experienced local experts to help with their top insider tips on how to sell or buy a house with as little stress as possible this year …
Tell us about the property market over the last year – are house prices falling in Dorset? Is availability increasing? Is there still a national move to the country?
‘No one could have predicted the exceptional demand for property over the last few years, nor that it would continue long after the last lockdown.’ said James McKillop, head of residential sales at Savills Salisbury. ‘However, it was inevitable that the associated price growth would need to return to a less frenetic pace in the long term and we are starting to see that. The legacy of the pandemic is buyers driven by lifestyle choices – it now seems to be ingrained in the UK buyer’s psyche. In a recent Savills survey of 1,500 prospective buyers and sellers of prime property, when asked what type of location is most attractive, the majority opted for small towns, villages and countryside over cities and their suburbs.
Sarah Cull, senior associate director at Strutt & Parker Salisbury, added: ‘The property market has certainly been “eventful” over the past year! For the first quarter there was very little stock; this eased and we had another busy and successful summer. The mini-budget brought about uncertainty and a rise in interest rates, which encouraged buyers with good mortgage offers to press on to conclude their purchase and lock in the rate. The end of the year was quieter as per usual.’
‘The market in the first half of 2022 was the strongest we have ever seen,’ said Harry José, branch manager of Roderick Thomas Castle Cary, agreeing with Sarah and James. ‘Asking prices were at their highest and we were still achieving two to three per cent above those prices on average. Since then we have of course seen a slow down, exacerbated by the autumn Mini-budget. Properties are now sticking around for longer, meaning a larger number of properties appear to be on the market at any given time – I’d say that agents on average have around twice as many properties available as they did this time last year. This isn’t because more properties are coming to the market, it’s because fewer are selling. Due to that slow-down, I am seeing many prices reduce, which of course contributes to an overall fall in house prices. However, buyers are still moving and good properties are still selling at strong prices – we are fortunate enough to sell some lovely houses, many to cash buyers who haven’t been impacted to the same extent by increasing interest rates. Others, especially the first and second-time purchase properties, are being impacted by apprehensive mortgage valuers, even when strong prices are offered by still-confident buyers.’
What do you see 2023 bringing in terms of the property market?
Harry José feels we may finally be on the other side of the COVID effect: ‘I strongly feel that we are really just seeing a return to the traditional cyclical nature of the property market which was normal pre-COVID. The spring booms and then the market tails off again in the winter.’
Sarah Cull agrees: ‘We feel that 2023 will bring about a more traditional market where properties take slightly longer to sell, but still change hands. It is widely expected that interest rates will settle in the later spring and the good weather always brings buyers back to the market.’
James McKillop commented on the longer financial view of the market: ‘Savills researchers anticipate slight downward pressure on values in 2023, but less pronounced than in the mainstream markets. There is still strong demand for the right property; the area remains hugely popular and while 2023 activity won’t be as high – or as frenzied – as it has been. We are still seeing the effect of a significant stock shortage. Good homes in good locations will always see strong demand and, if priced correctly, will sell well.
Taking a longer view, Savills researchers are forecasting a return to positive growth as early as 2024, with prices over the next five years seeing increases of up to 11.6 per cent.
A presentable but busy family home gets two hours notice of a viewing – what should they do?
Harry continued: ‘As I said, the house doesn’t have to be perfect all the time. House viewers really aren’t expecting daffodils on the window sill and freshly baked bread in the oven. I’d recommend making all the beds, giving the house a quick vacuum and washing up any dishes. Also – another tip from personal experience – make sure you stay out of the bathroom just before!’
Sarah had similar advice: ‘Air the house, light the fire (if it’s cold out), get some flowers on the table, clear the surfaces, make the beds, put the loo seats down and run the vacuum around.
‘Also, if you have dogs, do take them out for a walk during the viewing. We all love our pets, but not everyone sees them as man’s best friend.’
James also said that first impressions count, and that clutter is never good. ‘We would always try and give more than 24 hours’ notice, but it can be difficult in a challenging market, as you don’t want to lose any opportunity to show a good potential buyer around.
‘The key thing is first impressions, so de-clutter, put all the lights on and open the windows; a fresh, light-filled house will always do the trick. Buyers are very understanding about family homes, especially if it is a last minute request. Most just appreciate the opportunity to view.’
Are there any real life ‘do NOT do this’ bloopers you can share?
Sarah recalled one client who carried out their own viewing and they referred to the village as “the village of feuds and floods.”
She said: ’The viewer did not buy and we took over the viewings!’
Harry has seen some things too. ‘We have certainly had some worse than others, but hygiene and cleanliness are vital in all walks of life and house selling is no different. From minor things like not washing up before a viewing to real eye-openers like dog mess in the house, we have seen it all. It doesn’t have to be a show home, but please do make it feel welcoming!’
When you can see a glaring issue which you know may put buyers off, do you tell the vendor?
Sarah was comfortable with being truthful: ‘I will always mention it gently and constructively and come up with solutions – hopefully without causing offence! Often it is as simple as a bookshelf narrowing a hallway, or a sofa that could do with moving by a few degrees.’
James is also keen to work any issues through. ‘If I see something I know is going to be a problem, I will always try and discuss it with the owners and see what options are available. If there are remedial works required, I often think it is better to get them done. But if they are subjective (e.g. a bathroom needs updating), I would say to leave it, as many buyers like the chance to put their own mark on a house and will often change a kitchen or bathroom to suit their style.’
Harry pointed out that this is part of an estate agents’ job: ‘It’s an important but difficult conversation to have and one which requires some diplomacy. I always go ahead and inform the sellers, but open the conversation by asking them if they would like some advice on how best to present the house. The answer will always be yes, and thus you have the platform to go ahead and advise. After all, a seller is using an agent for their professional experience and advice.’
What unexpected features make a house easier to sell?
James didn’t hesitate: ‘With the cost of living affecting everyone, energy efficient homes are starting to attract premium prices. It doesn’t matter what age of house you have, if the heating system is modern and efficient, ideally with some form of renewable energy, buyers will see a significant upside. It is also the hassle factor of upgrading an older system that many buyers don’t want to face.’
Harry said ‘Houses with a light and airy feel are always easy, but also those that flow well. When a house has simple-to-access rooms and a layout that makes sense, it often just clicks instantly with the buyers.’
Sarah suggested it was simple attraction. ‘I always feel that the basic charm of a house is underestimated. I visited a wonderful house last week, oozing with period features and it had a lovely atmosphere; I am sure that when this comes to the market, buyers will be enchanted by it.
Do you have any tips for those who are finding the market difficult?
Harry suggested staying in touch was the top priority: ‘As much as I’d like for buyers to only be registered with me, I’d recommend they cast their net to all corners of their search area. It is also important to stay in touch with the estate agents, in the same way you expect them to stay in touch with you. You’ll increase the chances of an agent calling you directly before a property hits the shelves.’
James said buyers must keep the bigger picture in mind. ‘Even with a slight nervousness in the market, the best houses will likely have more than one potential buyer. You have to be front of the queue, and that means having your mortgage in place and/or being chain-free. Otherwise, you will probably have to offer more to be competitive.’
Sarah had some advice for sellers: ‘I’d say “Work with your agent”! Do you need new photographs, or a re-arrangement of the images online? Is the price right, can any additional press exposure be secured, is there anything that can be done to enhance the first impressions? All of these are sensible questions.’
Are there any specifically desirable locations within the area?
James said: ‘Shaftesbury – it has always been a popular spot and any of the villages surrounding it are consistently sought after, particularly those with amenities such as a village shop. Places like Manston and Stour Provost are also popular.’
‘The Chalke Valley is perennially popular,’ Sarah added, ‘as is Tisbury and its surrounding villages. People have always been drawn here for the excellent countryside and coast, the access to London and the West Country, not to mention fantastic schools.’
