Is now a good time to sell a house?

There appears to be a renewed sense of confidence in the property market, which could feed into home sales in the final months of the year.

Predictions of house price declines yet to materialise and the Bank of England's August interest rate cut helping to reduce the cost of borrowing.

This has boosted buyer purchasing power, leaving many homeowners to wonder if now is a good time to sell their property.

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Nationwide and Halifax both reported annual house price growth above 2% in August, following months of sluggish growth.

Meanwhile, the latest survey by the Royal Institution of Chartered Surveyors (RICS) is optimistic, with estate agents and surveyors predicting that house prices will rise over the next 12 months. Sales expectations are now at their strongest since January 2020. 

This is reflected in the latest Rightmove House Price Index, which tracks asking prices.

The property website found that asking prices were up more than usual for early September, rising by 0.8% on a monthly basis and 1.2% annually to £370,759.

The housing market will likely be boosted by falling mortgage rates. Lenders started reducing mortgage costs before the Bank of England rate cut, and they have continued to drop following the base rate cut to 5% on 1 August.

The average two-year fixed-rate mortgage is now 5.43%, while the average five-year fix is priced at 5.09%, according to Moneyfacts (as at 25 September).  These figures were 5.92% and 5.5% respectively in July.

So, what does this all mean if you’re thinking of selling your home? It can be tricky working out the right time to sell a property, especially in an uncertain housing market.

(If you’re thinking of buying a home, check out our guide to Is now a good time to buy a house?)

We explore what’s happening in the housing market right now, and things to consider if you’re planning to sell a house.

Is now a good time to sell a house?

The answer to whether it’s a good time to sell a house comes down to your own personal situation, as well as the state of the housing market, plus economic forecasts - although bear in mind, these are just predictions and they could turn out to be wrong.

In terms of the current property market, house prices and mortgage rates are both moving in the right direction.

Holly Tomlinson, financial planner at the wealth manager Quilter, tells MoneyWeek: “With interest rates on the decline and the summer holidays in full swing, many people are beginning to assess their affordability with a view to selling and moving at the turn of the month – conversations that have been on the back burner for the last 12 months at least.”

She adds: "Considering your options and getting your ducks in a row now would be a good idea if you are hoping to sell your home soon."

Lower mortgage rates should encourage more activity from buyers, which is good news for sellers.

Tomlinson notes: "Mortgage rates are slowly coming down, but higher mortgage rates are likely here to stay for some time yet, and we certainly won’t see the lows we had grown accustomed to previously any time soon. 

"It seems that more people have now accepted this, and with the market experiencing less turbulence, and house prices seemingly on the rise, more prospective sellers and buyers may come out of ‘wait and see’ mode as their confidence increases and they feel more able to decide their next steps."

According to Sarah Coles, head of personal finance at the investment platform Hargreaves Lansdown, the change in mortgage rates "is not a seismic shift, but it has helped inject some enthusiasm into the property market".

She adds: "Buying in a market with falling rates feels more comfortable, so it’s likely to encourage people back to viewings. Since the start of the year, sellers have been increasingly lining up to part with their home, so there’s a decent chance this will translate into sales and price rises."

The positive sentiment in the housing market can be seen in the latest RICS report, with buyer numbers rising slightly in July, and estate agents predicting that sales will rise over the next three months.

"Supply remains robust: the average agent now has 33 properties on the books. You can see the shift from a buyers’ market to something more balanced in the Zoopla figures that show buyers are now paying 96.8% of the asking price," says Coles.

Can you sell a house before Christmas?

Many people dream of selling and being in their new home by Christmas. 

But you need to act fast if you want to make that dream a reality.

Research by the HomeOwners Alliance, based on data from its Best Estate Agent Finder tool on how long it typically takes for a property sale to go through, found sellers typically face a 59-day wait.

That means homeowners need to list no later than 23 October if they want a sale by the last Friday before Christmas.

“With the wintry weather blowing in and shorter days already, it’s only a matter of time before thoughts turn to Christmas planning," says Paula Higgins, chief executive of HomeOwners Alliance.

"Invite three of the best local estate agents to value your property, check out their performance and reviews and carefully read the terms of their contract. When you’ve selected your favourite, instruct them to list your home on the main property portals before the 23 October to be in with a chance of selling before Christmas.”

Are you planning to step up or downsize? 

The question of when to sell also depends on if you are buying another property at the same time - and whether that costs more or less than your current home. 

Coles explains: “If you’re selling and buying at the same time, you can trade the loss of a premium on your property for being able to drive a harder bargain where you’re moving.

“The exception to this is for those who are downsizing."

Downsizers looking to maximise profits may wish to hold off selling, to allow mortgage rates to fall and buyer numbers to rise further, pushing up prices and making a sale more straightforward. 

If you’re thinking of selling you’ll also have to consider the costs involved. This can include estate agent fees, legal fees, stamp duty, and capital gains tax. 

So, if you’re selling because you would like to free up some money, weigh up whether it will be worth it after costs. 

"Waiting comes with risks"

If you are thinking of waiting a bit longer to put your home on the market to see if you can get a higher price, be warned that there are no guarantees with the future direction of the housing market.

Mortgage rates could tumble lower and house prices could soar higher - but then again, they may not.

Coles says: "If you’re planning to sell, waiting comes with risks. The Bank of England has warned it’s taking each month as it comes, and if core inflation rises, we could wait a long time for more cuts. We can’t know when mortgages will get cheaper – or how far they will fall - so you don’t know how long you need to wait for. 

"In any case, rates are likely to remain higher than we’ve been used to for a while yet. It means we don’t expect to get back to the intense sellers’ market of the pandemic boom, when properties flew off the shelves and sparked intense price wars."

According to Coles, the answer for those keen to sell now may be to make your property as appealing as possible, prepare your documents so you can move quickly, and price it realistically.

Tomlinson notes that sellers can "enter the process with a little more peace of mind than has been possible in recent times".

However, she adds that property owners who do not need to move may still wish to hold off in hopes for lower rates in the longer term. 

What’s happening with house prices? 

UK house prices had been flatlining or falling for much of 2024 amid high inflation and pricey mortgages.

But the latest Nationwide House Price Index for August shows average property prices rose at their fastest rate for 20 months at 2.4% annually.

The Halifax index put the annual growth rate for August higher at 4.3%.

This is echoed by Zoopla data that reveals buyers are now paying 96.8% of the asking price for a home, the highest of any point in the past 18 months.

It also depends on where you look in the UK. According to Halifax, Northern Ireland continues to record the strongest property price growth in the UK, rising by 9.8% in August but prices in London have risen at just 1.5%.

In terms of forecasts, estate agency Knight Frank had previously predicted a 4% drop in house prices for this year, but recently changed its forecast to a 3% rise.

Rightmove has also changed its mind when it comes to asking prices. It previously predicted a 1% decline for 2024 but has revised that to a 1% rise.

Zoopla is predicting a 2% rise in sold house prices this year, while Halifax expects "house prices to continue a modest upward trend throughout the remainder of this year". 

Coles comments: "There’s going to be a lid on price rises, not least because rising house prices and relatively high mortgage rates will still price people out. However, it’s not unreasonable to expect modest growth through the rest of 2024."