Is now a good time to sell a house?

UK house prices have started 2023 on a downward trend. Data from Halifax showed prices ticked up in February, but recorded an overall downward trend. And according to Nationwide’s latest house price index, house prices saw their biggest dip since 2012 in February 2023. 

The house price indexes give us some indication as to where house prices are going, but the overall sentiment is that they are likely to drop further this year and the property market is cooling down. 

Zoopla’s latest house price index also revealed that home sellers are having to accept an average 4.5% discount on their asking prices to achieve a sale – the highest in five years. This amounts to around £14,000 slashed off asking prices. 

So, while it is increasingly looking like a buyers market, for those looking to move, is now really a good time to sell a house? 

What’s happening with house prices?

Both Halifax and Nationwide reported different data in February - while the former recorded a small increase in house price growth, the latter reported a dip. 

The Royal Institute for Chartered Surveyors said buyer demand is at its lowest since 2009, while Rightmove said asking prices increased by just £14 in February, a time when the housing market is traditionally busy. 

All house price indexes measure growth differently, but the downward trend seems to be present across the board. 

Both Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and online estate agent Zoopla are predicting falls of 5%. The Office for Budget Responsibility (OBR) expects prices to fall 9% over the next two years. 

Is now a good time to sell a house?

Selling is hard enough, but with so much mixed data, selling is not an easy option. But, if you’re looking to sell a house there are a number of factors to consider at the moment.

“Whether or not now is a good time to sell will really come down to a seller’s individual circumstances,” says Karen Noye, mortgage expert at Quilter. “In times of uncertainty it can pay to take a wait and see approach – particularly if there is a risk of making a loss - but not everyone’s situation will allow for this. 

If you’re thinking of selling and using that money to buy a new home, the first place to start is looking at how reducing the price of your property is going to impact your finances moving forward. 

“If the property you are looking to buy is likely to also cost less due to the current market conditions, your finances add up, and it is the right property for you that ticks all the boxes for both now and in the longer term, then it may make sense to sell and make that move,” says Noye. 

But if you do not intend to buy after you sell, holding off might be a better option as house prices are likely to rebound in the longer term. 

“However, while the markets are looking more stable now compared to the end of last year, we still have a way to go and it could be some time before house prices start to climb again,” says Noye. So, you might end up having to hold on to your property for longer than you want to. 

“If you are in this position, you will need to seriously consider whether holding onto the property for the time being is viable or not.”

You will also want to look at prices in your area, and prices for the type of home you’re selling, so that you have a point of comparison and a higher chance of selling. 

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

But Louis Glanville, office head at Knight Frank Exeter, believes that “contrary to recent reports, now is a good time to look to sell your property”.

“We are seeing increasingly strong interest in homes which are realistically and sensitively priced,” says Glanville. “As the spring market approaches we are the busiest we have been in the last three to four months, with the high level of applicants resulting in competitive bidding for several properties which we are currently marketing.”   

But note the emphasis on “realistically and sensitively priced”. Even if it is a good time to sell a house, sellers will have to readjust their expectations.

“For those selling, it is essential to be realistic about the current market conditions and adjust pricing expectations accordingly,” says Charlotte Nixon, mortgage expert at Quilter. 

“There must be a mental shift away from the years of the pandemic when the market was incredibly hot but for many this will still mean that their house has increased in price particularly if bought over ten years ago.” 

Sellers should also consider inflation. 

“Selling a house can be a long process and while this period of inflation is not going to be as transitory as originally thought, it is predicted to ease in the next couple of years,” says Noye. “Selling and buying a new property can take as long as a year in some cases so you may end up selling the property just as the economy starts to improve.

“Deciding whether or not to sell will largely come down to your personal circumstances, including your current needs and objectives as well as your future plans and goals. Seeking professional financial advice can help you to weigh up your options and decide what is the most suitable course of action for you.”