It might appear daunting to upgrade to a larger property in a falling market, but now is the time to take such a seemingly bold decision. Our reluctance to move is down to a lemming mentality, believes Ed Mead from Douglas & Gordon in south-west London. Ironically, people feel more confident going up the ladder in a rising market. Yet, with prices predicted to continue dropping over the next six to 18 months, he says that this is the right point to break away from the pack. ‘The wisest are swallowing their pride and moving now.
In two years’ time, they’ll look very clever.’ Upsizing in a falling market can save thousands of pounds. If you sell a £500,000 house and buy a larger one worth £750,000, you might lose 10% (£50,000) off the one you’re selling, but you’ll save 10% (£75,000) on your new home a saving of £25,000. Another advantage of upsizing in a recession is being able to move to a better area. ‘Those who had to go to Herefordshire because they couldn’t afford Gloucestershire can buy there now,’ explains James Hayman-Joyce from agents Hayman-Joyce in the Cotswolds.
Author Margaret Price and her retired-headmaster husband, Christopher, have benefited hugely from upsizing. After selling their Somerset house 2½ years ago, they spent a frustrating period bidding for overpriced houses and being gazumped. Now that the market has turned, the couple have picked up a six-bedroom, five-bathroom house, substantially bigger than their old home, just outside Newton Abbot, Devon, for a reduced price, through Marchand Petit. ‘We saw the house in the spring of 2007 when it was on the market for £975,000, and we bought it recently for less than £875,000,’ explains Mrs Price.
In the process, they also gained a large workshop, a bigger hall, a good-sized kitchen and a four-acre garden. Mrs Price thinks you need to be bold when upsizing. ‘Determine the circumstances of the seller, and, once you find something you like, be tenacious.’
How to buy in a falling market
Almost everyone seems to be waiting for the last 10% to come off values, but there are deals to be done today. ‘You can chase the market down and then wait for it to turn, but at that point, everyone will jump back in and there will be a bunfight,’ points out James Greenwood from Stacks Property Search & Acquisition. His advice is to get ahead of the game and negotiate at leisure without competition, ‘taking advantage of large reductions that have already been made’. Don’t be put off by the figure on the property brochure in the current market, it’s almost meaningless.
Sometimes, a £1 million price tag has already been discounted, possibly having come down from as much as £1.5 million in stages. It might be an over-optimistic 2007 price, and, if the seller is desperate, you could negotiate down to £700,000, adds Mr Greenwood. However, don’t get too carried away with your bargain-hunting. ‘Spend time finding what’s right for you. Hunt down the finest property you can stretch to in the best street, with high ceilings and the garden facing the right way,’ says Robert Bailey from Robert Bailey Property.
The pressure is off, so take the children along and view properties at leisure on weekends, in a gentle, sensible way. And don’t be taken in by old tricks fraught vendors can employ, such as the quick paint job literally whitewashing over the cracks, adds Mr Bailey.
* De-clutter. Removal firms price jobs according to how much they have to shift
* Ask your agent about good removal companies and a moving checklist
* Pack a box of essential items: tea, kettle and bottle of Champagne