Why am I having problems selling my house quickly in 2011? And what should I expect to happen in 2011. Let me explain.....
Selling in today’s market is not quite as simple as it once was pre 2007. I’m sure you all know the main reason for this – yes, our banks. And how does that affect you trying to sell your house? Well, it’s all to do with the person who would have bought your house pre 2007. Banks quite simply are refusing to lend to anyone unless they have an excellent credit rating and plenty cash in the bank. Gone are the days where a house buyer could pop down to their local bank and get their 100% mortgage. Today they will be lucky if they are accepted and even if they are, they will need at least a 15% deposit, normally more. The more they can put in at the start, the cheaper their rate will be of course. This problem is combined by the current low interest rates which make it very unattractive for banks to lend to anyone. Not to mention the uncertainty over house prices – will they go up, will they go down?
So you see the person who would have bought your home pre 2007 has pretty much disappeared and is likely to stay away for a few years yet. What was an easy investment has now become a big risk to everyone. This has in essence, slowed down the whole housing market.
According to the latest UK Housing Market Survey by the Royal Institution of Chartered Surveyors (RICS) house prices are still slipping as a UK average. With 41% of its members expecting values to continue to fall through 2011. This is the bleak outlook we are all faced with today as property owners. The Government says things will get better in 2013 but most people talk about 2015 at the earliest – Ouch! I here you say.
But what about the outlook for 2011? I think it goes without saying 2011 looks set to be a tough year for many with the words negative equity becoming more and more familiar. Negative equity is basically when someone buys a house for 100k with a 100% mortgage, pre 2007 for example. The value of this property today is now £90k. So that means there is a 10k shortfall and is essentially in negative equity. The mortgage is higher than the value of the house. Lets not forget the innocent souls who were duped into those 110% + mortgages pre 2007, no need to give numbers on their predicament. Most of these guys will be ok while the interest rates stay low but what happens to them when they slowly start to increase. The continual pressure from the banks and increasing inflation can only mean one thing. Trouble!
Another problem to consider is the Public Sector and the loss of jobs that are on the way. Does anyone know the consequences of the cuts in this sector – I don’t know about you but the word ‘madness’ comes to mind. Exactly how does a country recover economically by making cuts at its core services? Time will tell I guess, but this is a different topic entirely – perhaps better discussed at another time. It’s exactly those victims who are going to be faced with redundancy and no job. No job means no to money to pay mortgage which in turn means sell house before bank comes knocking – that spells repossession to you and me.
To sum up, it goes without saying there will be many people faced with difficult situations this year. Many will be forced to give up their mortgage asap. Moving on and starting a fresh is possible and can be achieved through a fast house sale. If you need to sell your house quickly I can help you. For those of you who are fairing up not too badly so far, my advice to you is batten down the hatches. Pay off as much of that mortgage as you can while interest rates remain low. Then when things get even tighter you can always remortgage to release some equity if you have to, providing you can afford the higher monthly payments that will undoubtedly come with it.
Good luck to you all!