Getting the best price for your property

Mortgage market view

As we enter the final months of 2022, many people are understandably worried about how rising costs are putting an unprecedented squeeze on their wallets.

With energy and food price hikes grabbing the headlines, we wanted to reflect on how the mortgage market has fared this year and how it may change heading into 2023.

Driven by a high demand and insufficient supply of properties, annual UK house prices continued to rise overall so far in 2022 with values to July rising 15.5% up from 7.8% in June 2022¹.

However, with inflation and the cost of living expected to continue rising, we anticipate demand for properties to slow down in the remaining months of the year.

Whether this expected drop in demand will be enough to compensate for the limited supply and result in a meaningful price drop remains to be seen.

On the other hand, the re-mortgage market is expected to remain resilient, spurred on by customers seeking to lock in interest rates in anticipation of further rate rises.

Since inflation and the Bank of England base rate are expected to continue to rise, we strongly suggest that clients talk to their Wealth manager and Barclays Wealth Mortgage specialist if they have any concerns with their mortgage borrowing.

Last month we focused on the process for purchasing a property, what you need to consider, and how to prepare for it.

As noted above, demand currently continues to outstrip supply and you may be considering selling a property to realise its investment. This article aims to give some insight on how to value your property fairly when bringing it to market should you be considering selling.

The value of an accurate valuation

Kate Faulkner of Property Checklists suggests sellers use property-listing websites and apps at the start to find a good estate agent. Simply search your postcode for properties under offer or sold subject to contract.

Previous property sale prices are also available online and via apps with a quick search. However, Peter Bolton King from the Royal Institution of Chartered Surveyors shares a word of caution on property valuation sites.

“You don’t necessarily know that you’re comparing like for like with this information,” says King. “It can also be fairly out of date by the time it goes live as sales take many months to process. In a changing market, those few months can make a huge difference.”

Instead, information available online can be used as a starting point for valuing your property.

Estate agents are the next most popular port of call. With so many prospective buyers, sellers can be swayed by an estate agent’s high appraisal of their property.

But pricing too high can unnerve or put off prospective buyers. According to Faulkner: “Buyers today are really savvy. If you’re asking for too much, they won’t even come for a viewing.”

Should you find a buyer willing to pay your top price, and if the buyer requires a loan to complete the purchase, the lender still must ensure that the property’s value is reasonable before agreeing to provide a mortgage.

Getting an independent valuation

For a more nuanced valuation, Liam Boardman, Wealth mortgage specialist, suggests getting your own, independent valuation, or a full structural survey to see where you may need to improve your property to help increase the price.

“A good surveyor has access to more information than the average buyer and it’s their professional duty to make an informed and accurate valuation,” says Boardman.

A chartered surveyor conducts research in the local area to help to build a picture of the property and its current market value. They will look at the surrounding properties, school catchment areas, transport links and flood risk zones to build a holistic picture of the area around your property.

Following an in-person inspection, the surveyor pulls together their research, their findings from the survey, and current housing market patterns to finally reach what they consider is an accurate property value.

“The surveyor will inspect the property and note any key features or obvious issues with the property,” says Boardman. “But clients need to bear in mind that a valuation report is not a house survey and will not provide an extensive analysis of the condition of the house. Unlike a building and condition surveys, house valuations don’t explain defects or provide a cost estimate for any required repairs.”

What if the property is ‘down-valued’?

If the surveyor’s valuation comes below your or your estate agent’s expectations, it is often referred to as ‘down-valued’.

While this can be disheartening, it can help you avoid frustration in the future since most prospective buyers will need to conduct their own independent survey.

“The valuation is not an attempt to ‘down-value’ a property from an authentic higher price," says Boardman. "Surveyors have a duty of care to report accurately and independently. In any case, an accurate valuation can forewarn you about how a buyer’s lender may view your property. By pricing it accordingly, you stand a better chance that the sale will go through.”

Boardman concludes that the valuation report can end up being useful in many ways – by consulting it to find ways of improving your property, and hence increasing its value, you are well placed to achieve the best price.

Things to consider

Subject to application, financial circumstances & borrowing history. Terms and conditions apply.

Your home may be repossessed if you do not keep up repayments on your mortgage.