Is now a good time to sell a house?

Average house prices have passed their pandemic peak in recent months amid slowing inflation and interest rate cuts but there are fears that the Autumn Budget could dampen demand.

Predictions of house price declines haven't materialised in 2024.

This has been helped by inflation falling in the second half of the year and the Bank of England's interest rate cuts in August and November helping to reduce the cost of borrowing.

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

Nationwide and Halifax have both reported annual house price growth at two-year highs in recent months.

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 three and 12 months. Sales expectations also remain positive, which is a marked difference from the start of the year.

But there are fears that tax rises in the Autumn Budget could dampen demand and mortgage rates have been rising in recent weeks amid concerns about the UK economy and inflation.

So, what does this all mean if you’re thinking of selling your home? It can be tricky working out if now is 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 the 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 are rising but while mortgage rates are lower than at the start of the year, they are going back up, which may affect what buyers can afford.

Many buyers appeared to have been waiting for the Autumn Budget to pass.

The latest Rightmove House Price Index – covering asking prices – showed that while the August interest rate cut had boosted market confidence, asking prices increased by just 0.3% in September, well below the 1.3% average for the month and fell by 1.4% in October.

Ahead of the Budget in early October, Rightmove data shows buyer demand was 23% ahead of the same period in 2023.

This dropped to 18% following the Budget but has now ticked back up to 23% following the November interest rate cut.

However, the number of sales agreed is still 26% ahead of the quieter market at this time in 2023 and supply of new listings is up 6%.

Is the housing market slow?

The property market is expected to get slower as the winter season and festive period approaches.

Shorter daylight hours can make it harder to view properties but that can still be good for sellers as it means you could catch a keen buyer during this time of year.

Rightmove is expecting the usual seasonal slow-down in home-moving activity as we get closer to Christmas.

But the market is expected to accelerate in the new year as buyers look to beat changes to the stamp duty thresholds.

First-time buyer stamp duty relief is set to drop from £425,000 to £300,000 while home-movers will pay from £125,000 instead of £250,000. That is another factor that could motivate buyers to make a purchase sooner rather than later.

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.

Sarah Coles, head of personal finance at Hargreaves Lansdown, 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.

Are houses selling?

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 get lower - with some analysts predicting more rates below 4% in 2025 and house prices could soar higher - but then again, they may not.

Coles adds: "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.

Holly Tomlinson, financial planner at wealth manager Quilter, 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 early 2024 amid high inflation and pricey mortgages.

But the latest Nationwide House Price Index for October shows average property prices rose are rising at their fastest rate for 20 months at 2.4% annually - this is down from 3.2% in September though.

The Halifax index put the annual growth rate for October higher at 3.9% and said house prices were at a record high of £293,507.

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 10.2% annually in October but prices in London have risen at just 3.5% and by 5.9% in the North West of England.

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.

Savills had also forecast a 3% decline this year but has revised its expectations to a 2.5% rise. The agent also predicts house price growth of 3.5% next year.

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 and expects asking prices to rise by 4% in 2025.

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 adds: "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."