In our bi-weekly series, readers can email in with any questions about property to be answered by our expert, Jonathan Rolande. Jonathan is a professional property buyer and housing commentator who has bought and sold over 1,000 properties. If you have a question for him, email us at money@theipaper.com.
Question: I’m looking to sell my £400,000 detached house. Will Andy Burnham’s new home scheme stimulate the housing market and push up the price of my home?
Answer: Although we haven’t heard the full details of the scheme yet, I’d say not directly, and not soon.
Your First Home is for first-time buyers of new-builds only. They put down just 2.5 per cent and the state lends them 20 per cent of the price.
The scheme is intended to help first-time buyers, but, more importantly, to throw a lifeline to struggling housebuilders who, with a market downturn, had begun to mothball sites they feared may not sell.
It is not live yet and the devil will be in the detail. We will get the price caps, income limits and repayment terms in October’s Budget. Then, lenders and builders need time to set it up. If you plan to sell this autumn, it won’t affect you.
But the indirect effect is interesting.
Building hundreds of thousands of homes – private and council – takes a small army. Every house needs groundworkers, bricklayers, roofers, joiners, plumbers, electricians, plasterers, decorators, kitchen fitters and more.
Then come the lorry drivers, merchants, surveyors, solicitors and removal firms. Multiply that by hundreds of thousands of homes and you have a lot of people with more work and more money to spend.
Some of those people will want to move up the ladder. A site manager or busy electrician with a full order book is exactly the sort of buyer who might want a £400,000 detached house. Growth spreads that way, slowly, and it will lift the wider market over time.
But, we should be realistic. Right now the market is weak. Buyers are nervous about jobs, bills and mortgage rates, and many are waiting to see what the Budget brings. A promise of future building work does not make someone offer more for your house this week.
We can look back at history as we have been here before. Help to Buy ran for years, and many in the trade argued it lifted new-build prices more than anything else.
There was a trickle-down effect to older homes, but other factors such as cheap borrowing and a thriving buy-to-let market boosted prices more.
So, what should you do? If you need to sell, sell on today’s market, not a hoped-for one. Get three agents round and ask each for evidence of what has sold nearby, not what is on the market. Get sale prices data on the length of time they took to go.
Price to attract buyers from the first week, because a house that sits unsold goes stale and often ends up cheaper. It’s a cliché, but de-clutter, tidy up and fix any small items that might deter a buyer. Choose your agent wisely as it can make the difference between selling and staying put.
And remember – if you are buying another home, what you sell for doesn’t matter – the gap between them is what matters. So, if yours does increase in value, you can bet the one you purchase will too!
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