Thinking of selling your home? Do it now before prices fall, says Lancashire estate agent

Penwortham estate agent Michael Bailey said that as the Bank of England raises interest rates to counter inflation and the cost of living rises, now is the time to sell as house prices are expected to fall next year.

He points to analysis by a financial consultancy called Capital Economics that forecasts the Bank of England base rate hitting 3 per cent by next year, triggering a 5 per cent drop in house values.

This is set to be brought on by a jump in the average mortgage rate from 1.6 per cent at the st art of this year to 3.6 per cent in mid-2023, the steepest rise in 32 years.

He said recent analysis found the average house price in Preston and South Ribble was £189,034. So the forecast 5 per cent drop would reduce that to £179,582 - meaning sellers would stand to lose out on £9,452.

In Penwortham, the average house price is currently £237,993 so a 5 per cent reduction would cost a seller more than £11,500.

Michael, who runs his independent estate agency based in Penwortham, serving Preston and surrounding areas such as Lostock Hall and Leyland, said: "If you're considering selling your home, now's probably the best time to do so. If you put it off, you could find that you're selling it for a much lower price a year from now."

He pointed out how spring and summer were traditionally good times of the year to put your house on the market.

"Generally speaking, people are more interested in purchasing a new property and moving home when it's drier and sunnier, partly because nobody wants to be packing, transporting and then unpacking their belongings when it's wet and windy.

"Not only are there likely to be more buyers on the hunt for a new home right now, your property will look more attractive and inviting if the photos used to market it are taken when the weather's fine and the garden is in full bloom, with the lawn and surrounding plants looking lush.

"Taking advantage of this seasonal window is going to be even more important this year. The forecast rise in mortgage interest rates in 2023 is likely to make home buying less affordable for people, with some homeowners and buy-to-let landlords finding themselves forced to sell.

"When this happens and more housing stock hits the market, it causes values to drop and all sellers are forced to accept lower prices."

He said that the parts of Lancashire with a lot of first-time buyers were more at risk because people in this group often stretch themselves further to get on the property ladder and don't always have a financial cushion against mortgage rate rises.

Buy-to-let landlords that find themselves faced with higher arrears as the cost-of-living squeeze bites tenants, may also start to exit their investments, releasing yet more property onto the local market and depressing prices even further, added Michael.