House price forecast: what will happen to asking prices in 2023?

 

 

 

 

 

 

 

 

 

 

 

 

There’s been a lot going on in the housing market this year. We started 2022 with months of record-breaking house price increases, huge levels of demand from buyers, and homes selling more quickly than ever before. 

As the year progressed, we started to see the market settle down after an exceptionally busy two years, and were returning to the kind of housing market we’d seen in the years prior to the pandemic. 

And then interest rates started to increase, and some buyers put their moving plans on hold as mortgage rates also climbed.  

So how could the events of 2022 affect the property market next year? Here’s how things are looking right now. 

What could happen to house prices in 2023?

This year we saw asking prices in Great Britain rise by 5.6%, to an average of £359,137. This was almost £17,000 higher than in 2021, when prices increased by 6.3%. 

In 2023, we’re forecasting that average asking prices will drop by 2%, which means prices will still remain higher than they were after the incredibly busy home-moving period of 2021. 

One of the main drivers of the house price growth we’ve seen over the past two years has been the imbalance of supply and demand, with far more people looking to move than there were homes available for sale. And in a more settled housing market, buyers will have the time and space to make sure they find the right home for them. As a result of this, we anticipate the time it takes to sell a home increasing to what we’d expect to see in a more ‘normal’ housing market, of around 60 days. 

Our property expert, Tim Bannister, says: “After two and a half years of frenetic activity, it’s easy to forget that having multiple bidders immediately lining up to buy your home was the exception rather than the norm in pre-pandemic years, and there will be a period of readjustment for home-movers as properties take longer to find the right buyer.” 

READ MORE: How to get your home ready to sell 

So what will this mean where you live? 

Our house price forecast is based on a national average, so we expect that prices in some pockets of Great Britain to outperform others. This is because house price changes vary across the country, with lots of smaller, local markets affected in different ways. For instance, price growth in an area could vary from street to street depending on the types of property available, the desirability of the location, and buyer affordability.  

You can find out how much the average asking price currently is where you live in our December House Price Report.  

Are people still looking to move?

After the uncertainty brought about by interest rate rises and high inflation, we’re seeing signs that some buyers are ready to get started with their home moves as we head into the New Year. This month, views of homes for sale on Rightmove are up 11% when compared to the same period in 2021, suggesting that 2023 moves are on the cards for those who are able to do so.  

Our property expert, Tim Bannister, says: “We’re heading towards a more even balance between supply and demand next year, but we don’t expect more significant price falls in 2023. This is reflected in our prediction of a relatively modest average fall of 2% next year.” 

What are estate agents saying? 

Guy Gittins, CEO at Foxtons, says: “2022 has certainly been a year of two halves. We started the year still riding the wave of momentum from peoples’ changing requirements following Covid. As interest rates started to increase the market in London paused to catch its breath, and in the weeks that followed, we saw buyer demand fall sharply.”

However, there seemed to be a strong number of buyers who had factored higher rates into their budget and were still determined to transact,” he adds.

Rob Kennedy, Director at Philip James Kennedy in Didsbury, says: “The month of December is a good market barometer as we register the most proactive buyers who are planning on moving in early 2023. Whilst there are less viewings and new instructions in December, we encourage as many new sellers as possible to launch their properties mid-December, as they enjoy high levels of internet activity with clients watching video tours and considering moving over the festive period.”

“This culminates in one of the most popular property search days of all which is Boxing Day, where you definitely want your property to have a presence. These are the properties that will attract the first wave of viewing activity in January and sell first.”

 

 

 

 

 

 

 

New Build Conveyancing Explained

 

 

 

 

 

 

 

 

 

 

 

 

 

As the government continues to support the building of new homes, there’s a decent chance that the property you’re interested in buying is going to be a new build. As there are plenty of differences when it comes to buying a new build property, it’s really important that you choose a new build conveyancing solicitor who’s experienced in working on new build purchases.

How does conveyancing for new builds work?

As a buyer of a new build you often have to commit to your purchase before the building work is completed, which is why the new build conveyancing process is often different to buying an older home. You may be buying a property before construction has started or while your new house is being built, so you’re effectively going off what you’ve seen in the show home or a computer-generated set of drawings.

Read here for more information on conveyancing.

The conveyancing process for new builds step by step

Step 1: Buyer reserves the property

The buyer is usually expected to put down a non-returnable reservation fee between £500 and £2000.

Step 2: Buyer instructs a conveyancing solicitor

Choose a new build conveyancing solicitor, experienced in working on new build purchases.

Click here to get a personalised conveyancing quote.

Step 3: New build conveyancing checks are carried out

This is usually a much quicker and more intensive process with only 28 days to exchange contracts

Step 4: Buyer pays the deposit

This is 10% of the total new build price

Step 5: Exchange of contracts

This is usually within four weeks from reserving the property

Step 6: Completion

This is the date when your conveyancer will transfer the funds provided to the seller’s lawyer

Before new build conveyancing begins

After deciding to go ahead and buy, you’ll likely have to put down a reservation fee of between £500 and £2000. This usually isn’t returnable but will come off your purchase price when you reach completion.

As soon as you have an offer accepted on a new build home, you need to immediately instruct a conveyancer and get your mortgage in place. Deadlines can sometimes be extended, but you may find that there’s a financial incentive for meeting agreed timescales and not losing both your reservation fee and the house.

During the buying process

It will be up to you and/or your financial adviser to keep in touch with your lender and either arrange for an extension to the product you have chosen, or switch to an alternative. Either way you must make sure you have a valid mortgage offer in place for when the property is eventually built.

Your conveyancer will have to thoroughly check the title documentation, planning permissions, building control and any warranty of your new house for you. This is often a lot more complicated compared to normal transactions. As your legal representative may need clarification in order to thoroughly check the contracts, you must be in a position to answer any queries as quickly as possible.

You will then pay a 10% deposit to your conveyancing solicitor who will transfer this to the seller’s solicitor, unless you are buying with the Government’s Help to Buy scheme, where the deposit is 5%. Look out for developers registered with a warranty provider as this will protect your 10% deposit from penalties from withdrawing from the sale if there are unreasonable delays.

The last steps: Exchange and Completion

Once you’ve reserved the property, you’ll typically have four weeks to exchange contracts. If you don’t manage to do this, then the builder can pull out of your deal, meaning you lose both your reservation fee and the house. If the development you’re buying into is very popular, builders can be particularly ruthless when it comes to hitting timescales. For more information on exchanging contracts please read our house buying checklist.

Once everything’s been ironed out, including details such as local searches, you can work towards exchanging contracts. To provide additional peace of mind, you should receive a ten-year guarantee from the builder which is usually provided by the National House Building Council (NHBC), Buildzone, Premier Guarantee or another specialist warranty provider. You should ensure that you know exactly what is and isn’t covered and for how long before you agree to exchange contracts.

 

Choosing your perfect property

 

 

 

 

 

 

 

 

 

 

 

 

There are lots of things to consider when beginning your property search. When deciding which area you want to live in, research these points:

• What is the area like — does it have large open spaces and quiet roads or is it built-up with lots of traffic?
• Check the transport links — find out how long it will take you to commute to work and do the school run.
• Find out what the local schools are like.
• Check what amenities are located in the local neighbourhood.

Before viewing properties, think about these factors:

• Do you prefer to live in a house or a flat?
• Are you looking for a new-build property or an older style?
• How many bedrooms do you need?
• Is having a garden important to you?
• What is the parking like — does the property have a garage or a driveway or is on-street parking available?
• Can you extend the property or convert part of it, such as the loft, to create more space?
• Can you afford it? Make sure you have calculated what you can comfortably afford so that your finances aren’t overstretched. A larger property may be tempting but bear in mind that it won’t only be dearer to buy but more expensive to maintain. You also need to pay higher council tax for a larger property so be aware of the total cost of buying a home before arranging viewings.

When viewing properties, check the general condition and keep an eye out for signs of damp or cracks in the walls. Look at the boiler, turn on the taps and check the windows and flooring. A survey will highlight any issues but it’s best to be aware of any problems as soon as possible.

A second viewing is recommended to be completely sure before making an offer. You are also more likely to notice things that you missed during your first viewing.

Make an offer

When you’ve found a home you like, it’s time to make an offer to the seller. This is usually done via the estate agent. Don’t be afraid to offer lower than the asking price because your negotiations can start from there. Before making an offer, consider these points:

• What fixtures and fittings are included?
• Is it leasehold? If so, find out what the ground rent and service charges are.
• How much is the property worth? Research how much similar properties have sold for in the surrounding area.
• What is your price limit? The asking price may fall within your budget but you need to account for any works that have to be carried out.
• Are there other interested parties? Find out if the seller has already received offers or if the estate agent is aware of other buyers who are interested in making an offer.
• How appealing are you as a buyer? Are you a cash buyer or do you have a mortgage in principle? Are you a first-time buyer, are you selling your current home or have you already sold it?
• What is the seller’s position? Can the seller ensure a quick sale or is a chain involved?

Once your offer has been accepted, you will receive confirmation in writing and can instruct your solicitor to begin the conveyancing process. You can also instruct a surveyor and go ahead with your formal mortgage application. Bear in mind that your offer is not legally binding until the exchange of contracts.

Beware of gazumping

Gazumping occurs when the seller rejects your offer – having previously accepted it – in favour of a higher offer received from another party. Unfortunately, gazumping is legal and you may be gazumped at any point before the exchange of contracts, which is when your purchase becomes legally binding. Depending on how far you have got through the home-buying process, you could be severely out of pocket and end up being back at square one having to look for another property.

Whilst a higher offer is usually a reason for gazumping, it could be that another buyer is in a more attractive position than you. For example, you may be in a chain that’s not progressing very quickly or are taking a long time to move forward with your mortgage. You can try to prevent gazumping from occurring by being prepared before you make an offer, asking the seller to withdraw the property from the market, acting quickly throughout the home-buying process and taking out insurance.

Proceed with your formal mortgage application

For your formal mortgage application, you will need to provide documentation that includes:

• Proof of ID, such as your driving licence or passport
• Proof of your address, which can be a council tax bill, utility bill or credit card bill, etc.
• The last 3 to 6 months of bank statements, depending on the lender
• Proof of your deposit, such as statements from a savings account. If someone is gifting you the deposit, you will need to provide a gift letter.
• If you’re employed — the latest P60 and at least the last 3 months’ payslips
• If you’re self-employed — the last 2 to 3 years of certified accounts, SA302s and tax year overviews
• If you receive a pension income — your pension statement or pension payslips

Our expert mortgage brokers, located throughout Kent, London and Edinburgh, are available to assist you with this. We will provide you with a dedicated mortgage consultant who can help you to prepare the paperwork for your mortgage application. This ensures it meets the lender’s requirements and avoids any unnecessary delays. Simply call us on 01322 907 000 to get started or send an enquiry to us via our contact form and one of our mortgage specialists will reply to you as quickly as possible.

Choosing a solicitor

You need to appoint a solicitor to carry out the conveyancing work for your property purchase. The conveyancing process begins after you have had an offer accepted on a property and can take about 12 to 16 weeks. Whilst this may seem like a long time, it’s vital that the legal work is carried out correctly to protect your interests when buying your new home. Your solicitor will perform tasks that include:

• Checking the draft contract and raising enquiries with the solicitor representing the seller
• Carrying out the legal property searches, which include the local authority searches and Land Registry documentation, among others
• Checking the conditions of your mortgage offer
• Handling the exchange of contracts
• Completing the transaction
• Paying any stamp duty that is due
• Registering the change of ownership with the Land Registry

You can verify the standing of your solicitor by contacting the Law Society or the Conveyancing Association. Alternatively, we work closely with solicitors and are happy to recommend one for you.

Instruct a surveyor

A surveyor assesses the condition of the property and the report is more in-depth than the basic valuation your lender will carry out before offering you a mortgage. Although it’s an extra expense, we strongly recommend you have a survey done as it will provide you with information about any structural damage or potential issues that you need to consider when proceeding with your purchase. Ensure the surveyor is a member of a professional body, such as the Royal Institution of Chartered Surveyors (RICS). The main property surveys to choose from include:

• A condition report — this is a basic survey that summarises the property’s condition and is conducted at a superficial level.
• A homebuyer report — this is more in-depth and is non-intrusive. The surveyor checks the soundness of the property, noting any major defects and works that may need to be addressed in the future.
• A building survey — this is the most in-depth survey and the most expensive. Also known as a full structural survey, the surveyor checks the structure and condition of the property as well as the materials used. Details are provided of repairs that need to be carried out along with the costs and timings involved.
• A snagging survey — this basic survey is only needed if you’re buying a new-build property or one that has just been renovated. It ensures there are no outstanding issues to be dealt with. For example, the surveyor can check that the doors open and close correctly and that the surfaces are all flat.

If the survey highlights any significant issues, you are entitled to ask the seller to rectify them before you purchase the property or to renegotiate the price. Alternatively, you can withdraw your offer altogether.

The exchange of contracts

When you’re happy with the survey and legal searches, your lender has approved your mortgage, there are no outstanding issues and a completion date has been agreed, you can go ahead with the exchange of contracts. This is when you sign the contract and your solicitor swaps it with the signed contract from the seller’s solicitor. At this point, you need to have buildings insurance in place and pay your deposit. We can arrange the buildings insurance for you if you don’t already have an insurance company to use.

Don’t overlook the importance of checking that everything is correct and there are no outstanding issues before the contracts are exchanged. Once this happens, you are legally committed to the transaction.

When you have exchanged contracts, you can look forward to the completion day. Make arrangements to move your belongings into your new home, whether that involves a removals firm or hiring a van to move everything yourself. Contact the utility suppliers and inform them of the move, arrange for meter readings to be taken and organise a mail redirection service.

Completing the process and moving in

Completion usually takes place about 2 weeks after the exchange of contracts but it can be done on the same day if necessary. For completion, your solicitor will transfer the remaining funds to the seller’s solicitor and you need to settle any outstanding mortgage and legal fees. When that’s been done, you can then collect the keys to your new home — congratulations!

Afterwards, your solicitor will register the transaction with the Land Registry for the change of ownership and any stamp duty that is due will be paid. Be sure to notify important bodies of your new address, such as the local council, your doctor, DVLA, your bank, your insurance company, your telephone and Internet providers, your vet, etc. We also recommend that you take out home contents insurance to protect your belongings. Our professional financial advisers can arrange this for you as well as the buildings insurance if you prefer.

When you have moved into your new home, make sure that all of the important documentation regarding the property has been collected and stored in a safe place. These documents will be important for the next time you move home.

 

 

 

 

 

 

 

What is a conveyancing mining search?

 

 

 

 

 

 

 

 

 

 

 

 

 

When you are buying a house, your conveyancing solicitor may say it is necessary to carry out a mining search. The purpose of this search is to find out if there is any likelihood of mining activity having been carried on beneath the property you are looking at or in the nearby area.

Buyers often question why it is thought necessary to make a mining search when there is no sign of any mines having existed in the area. The answer is that when mines are closed, they leave little or no evidence on the surface but can still cause major problems for property owners.

Why is a mining search important?

Mine-workings often run long distances underground from the mine shafts and extend beneath residential properties. When old tunnels and shafts cave in, this is likely to cause subsidence and damage to buildings above the mine.

Old mine shafts were often not properly capped or filled in when the mine closed. Cases are reported regularly of old shafts collapsing, causing damage to houses as well as being dangerous for residents.

There are also environmental issues associated with old mine workings - for example, spoil may have been dumped over a wide area that can contain dangerous naturally occurring elements such as arsenic. Water flowing through an old mine may become contaminated and cause soil contamination in surrounding land, while explosive gases can still build up in abandoned coal mines.

Past mining activity may reduce a property's value

The value of a property can be severely reduced if it is discovered that it is potentially affected by mining activity or that mining activity could take place in the future. This is also likely to affect buildings insurance premiums.

Consequently, your conveyancing solicitor will recommend buyers have a mining search carried out if a property is in an affected area. Mortgage lenders will insist on such a search when a mortgage is being obtained, and the Law Society advises it even when no mortgage is required.

In fact, there is no such thing as a comprehensive mining search, as there is no single register of where mining has taken place. Many minerals have been mined by underground workings in various parts of England and Wales, going back to pre-Roman times, but the existence of many mines has not been recorded.

 

Coal mining searches

Coal has been the most commonly worked mineral, with mines having existed in many parts of the country. Fortunately, the Coal Authority has fairly comprehensive records of where coal has been mined, as well as surveys showing where coal seams are known to exist. A coal mining search can be made to discover what information there is relating to the property.

Although it is well-known that coal mining took place in some areas, in others, its previous existence is less commonly known. So, if your conveyancing solicitor says a coal mining search is necessary for a property in, say, Gloucestershire, Somerset, Kent or Lincolnshire - or even parts of Devon - he or she has not taken leave of his senses, as coal has been mined in all these counties.

A coal mining search will provide information on the following:

• past, present and future underground coal mining;
• mine shafts and adits;
• coal mining geology;
• past, present and future opencast coal mining;
• coal mining subsidence (damage notice/claim/method of discharge of any remedial obligations/stop notice/request for preventive works);
• mine gas emissions;
• incidents dealt with under the Authority's emergency surface hazard call out procedure.
• Additional advice may also be included where appropriate, depending on the mining circumstances.

While there is little underground mining being carried on at present, coal is still being worked by open-cast mining. This involves stripping the soil and rock overlying a coal seam, removing the coal, then reinstating the land. Such work will be carried on over a large area and involves heavy earth-moving machinery. The coal mining search will show if any such activity is planned in the vicinity of a property.

One of the benefits of having an official coal mining search carried out is that it includes insurance cover against any loss of value (up to a maximum of £50,000) attributable to any material change of any of the information in a subsequent search report from that contained in the report to which the insurance attaches. This cover is in addition to any right to claim compensation for subsidence.

 

Searches for records of tin and other mines

Tin and other metal ores have been mined in parts of Cornwall, Devon and Somerset for many years. Although there is no single register, a number of companies have compiled extensive records of old mine workings. When buying a property in areas where tin is known to have been mined, a search can be made with one of these companies to ascertain whether any mining activity would affect the property.

A potential problem for homebuyers in areas of the south-west of England is something known as mundic. This is a form of concrete in which waste rock or spoil from old mines was used as aggregate. The chemical content of the waste reacts with the concrete over time and causes it to degrade and lose strength.

While a tin mining search will not itself indicate whether a property contains mundic, if the search reveals existence of former mine workings in the locality, a mundic survey may be recommended. In some cases further testing will then be necessary.

Salt mines and brine-pumping in Cheshire

Salt has been mined in Cheshire for hundreds of years, and one mine is still in production. Salt is also extracted from beneath the ground by a process known as brine-pumping.

These pumping operations cause cavities to form below ground. If they collapse damage may occur to buildings on the surface. Unlike most other forms of mineral extraction such as coal mining it is not always possible to precisely define the areas which are likely to be affected by subsidence due to natural brine pumping or to attribute the cause to a particular pumping operator.

Because of the difficulty of ascribing liability to any particular pumping operator, a single compensation scheme was established. When acting for homebuyers in the relevant area, a conveyancing solicitor will initiate a search with the Cheshire Brine Subsidence Compensation Board (the Brine Board) that will indicate whether:

• the property is situated within the statutory compensation district;
• the property is within a Consultation Area prescribed by the Brine Board;
• a Notice of Damage has been filed in respect of the property;
• if so, whether the claim was accepted and how it was discharged.

Elsewhere in England and Wales, other metal ores and minerals have been worked, either by underground or open-cast mining. Stone slate and clay have also been extracted by underground workings in some areas. Although there is no central register of such workings, a number of expert companies have compiled records and can supply information on properties in affected areas.

Your conveyancing solicitor will be able to advise whether a mining search is required and the type of search needed. The cost will depend upon the type of search and the supplier; coal mining searches currently start from £30. In some cases, a combined mining and environmental search can be ordered, which will be cheaper than having separate searches.

Your solicitor will also be able to advise on the results of the search. In most cases, a search will not reveal anything to worry about but does provide peace of mind, as well as assurance to your mortgage lender and any future buyers. However, in a few cases, it may be necessary for a more detailed survey to be carried out.