JANUARY UPDATE – And a New Year Begins…

“I love beginnings.

If I were in charge of calendars, every day would be January 1.”

Jerry Spinelli

Sunday 1st January 2023

“When you first wake up in the morning, Pooh,” Piglet said at last,

“What’s he first thing to you say to yourself?”

“What’s for breakfast?” said Pooh. “What do you say, Piglet?”
“I say, I wonder what’s going to happen exciting today?” said Piglet.
Pooh nodded thoughtfully. “It’s the same thing,” he said.

Winnie the Pooh

AA Milne

Happy New Year’s Day, one and all!  

I do love that quote from Winnie the Pooh, and in this period between Christmas and returning to work in the New Year, it is so hard to get organised, know what time it is … know what day of the week it is … remember when the bins are due to be collected!! Oh the stresses in this Betwixtmas Chrimbo Limbo, as a friend called it when he texted me this week.  For a laugh, if you have a moment, do find that sketch from Michael McIntyre about the gap between Christmas and New Year …!

But the brain rest is good, and sets us up for the working year ahead. 

We did have a number of viewings this/last/(what day is it??!) week.  Oh, if today is Sunday, then last week.  And booked a couple of ‘second viewings’ from it.  It was definitely worth being available for viewings, albeit we were not in fully work mode.  I love doing viewings in this period, as everyone, clients, viewers, and we alike, are just that little bit more relaxed, with more time on their hands.  

We did a viewing late on the afternoon of 23rd December, and received an asking price offer. Both the buyers, and the seller, were delighted.  

It has been an interesting year for Sam and me, especially the last quarter.  As some of you may know, I was diagnosed with breast cancer in late summer, from which followed surgery and treatment.  Recovery didn’t quite go according to plan, and I found myself back in hospital for almost a week in November.  

A few niggles followed, but all appears well now, thank heavens, and we could not thank our clients, buyers, and the teams around us more for their support, help and understanding during this period. 

We ensured that nothing, workwise, was allowed to slide, and most clients were not even aware of an issue until after that window had passed.  

We did put measures in place to ensure that our service levels never slipped, and I kept in regular touch with our clients, even emailing or calling from the brief spells in hospital.  

In the background, we brought our elder daughter, Ellie, in to help with some aspects of the business (her experience having worked in an estate agents office, as well as one of the leading solicitor firms in the conveyancing department (before leaving to concentrate on her first love, being a portrait artist in Newbury), made her the ideal person to step in and help cover when I was not available.  

Of course, Ellie grew up as an estate agent’s daughter, and shares Sam and my commitment to clients and customer service.  It was also fabulous that with many of our clients being ‘returning clients’ some already knew her as well from past dealings.  Her knowledge of the conveyancing processes has been really helpful when also giving confidence, as well as accurate and useful information to clients. 

That, thankfully, was all last year, and we are into a new year, and back to good health.

So back to houses and the property market.

There are signs that the year is shaping up to be pretty good for the year ahead. When I say ‘good’, what is mean is that it isn’t looking as catastrophic as some headlines might predict.  

What is unhelpful is the regular beating of the drum from the press that all is ‘doomed, Capt Mainwaring’.  We haven’t seen evidence that this is the case at all, certainly not to date.  If people sit on Rightmove every day, and analyse daily the price of houses, they can certainly find ‘evidence’ of a slip here or there, but it is often a daily one, rather than a significant one.  

Statistics are so dangerous.  For instance, if house prices usually rise by say 5% in a period, but actually only rose 3%, some headlines will scream that prices have ‘fallen by 2%’.  This clearly wouldn’t have been the case.  In this statistic, the headline should have read ‘house prices rise by 3%’!

I cannot foretell the year ahead, but I have sold houses in this market for decades. 

I have worked throughout various recessions.  I was doing this job in Winchester in 2007/8 and the banking crisis (remember Northern Rock??!,   In Winchester, we didn’t experience a price fall of any significance, albeit various other areas of the UK did (including London) but the market bounced upwards fairly swiftly. 

It always has done.  

I have just read an article suggesting that any price adjustments are likely to be regional, (which makes sense) and of course will depend of the popularity of any particular area and the supply and demand within that area.

Some investors have certainly come out of the market, as interest rates rose and tax incentives reduced. For them, their properties became untenable as they were making a loss.  But these are often small investors, with one or two properties.  Those larger portfolio investors, often who bought for cash, are still tending to retain, and to build, their portfolios.

Interest rates are showing signs of coming back down again.  

Whilst they are not at the low levels they were before the ‘mini budget’, they are coming back from the uncomfortable moment when they were looking at being 6-7%.

I spoke recently to a surveyor, valuing properties in Winchester. 

She advised that, in December, surveyors valuing, and therefore banks lending, were quieter than previous Decembers, but were not concerned. She added that the banks she was speaking with were anticipating getting busier again around the second or third week of January. 

Within an article in CityAM today (Buy and sell: What London house prices might do in 2023 (cityam.com), Rightmove is predicting a 2% drop overall in the UK for 2023.  However, they do add that this is regional, with some areas being affected more than others based on the ‘desirability and affordability of the exact location’.  

Other lenders are predicting other figures, but it must be remembered that desirable areas have always remained sought after, and demand vs supply has always had an effect on prices within those vicinities. 

It was also interesting to note that the article suggests that it may take longer to find a buyer for each property next year, as long as a couple of months to go under offer, which is slower than in previous years.  We have certainly seen that there are fewer buyers coming into the market to buy, but those who do, are actively seeking to buy, and (so far) have not sought to offer significantly under the guide price of a property to secure it.  

That being said, it does rely on properties being priced realistically, rather than overinflated by some agents seeking to secure an instruction over the other agents pitching for the business. There is always a fair amount of this in areas where there are a lot of estate agents, and fewer houses coming onto the market.   Many agents will fight to get an instruction, and believe that the best way to beat other agents is to over-inflate the suggested value of a property to secure the instruction to market over competitors. This is such a dangerous thing to do, as the last thing an owner needs is for their home to sit on the market for longer than it needs to, chipping and reducing away at the asking price until it often comes down to below where it should have been had it been priced correctly at the initial launch.     

Sam and I always strive to price properties accurately when we are invited to visit home owners.  We take reports and evidence to back up our thoughts and suggestions, and thankfully we lose very few properties which we are invited to value.  Homeowners appear to value our honesty (which they often say is ‘refreshing’, so far we haven’t been advised this is a synonym for anything else!).  

We did ‘lose’ a house last August, much to our disappointment. The agency which ‘won’ the instruction valued it for £150,000 more than we did.  It still hasn’t sold, and the price has reduced a couple of times, and is now less than we advised last summer.  This property, along with others which start at too much money, now has lost its shine on the market, which is such a shame. It was a fabulous property. 

So to summarise my thoughts for the year ahead here in Winchester (and please remember that this missive is purely my thoughts, rather than official views from any organisation we work within!), I see the market stabilising price wise.  

I do not immediately foresee any significant price drops, but buyers are going to remain cautious. Pricing correctly is essential, and buyers who are looking to buy, will recognise if a house is overpriced, and will likely not view it. 

Any significant price drops might well be because a property was overpriced initially, rather than a sign that the market is slipping.

At the right price, the buyers are there, fewer than there were a year or two ago, but definitely still there, and wanting to buy.  

A house will likely take a month or two to get a successful sale, rather than a week as previously found, but the buyers looking are stable and buying with mortgages in place, and aware of the price (and value) of buying vs renting.

And those are my personal predictions for the market in this part of Hampshire.  Fingers crossed that I am right!

In the meantime, Sam is down at his new allotment (only waited seven years for one!) and is frightfully excited as he plans where to plant runner beans, potatoes, and (I believe) sweetcorn.  Wish me luck at being an allotment widow this year.

Have a wonderful 2023, one and all, (and please let me know if you need any surplus potatoes later in the year!)

Sam and Nony