How to move in a slow market

a Victorian terrace

Ignore the housing market to get moving

The property market hasn't just been falling a little, it's been entirely unpredictable throughout the year. The London property market is, quite frankly, all over the place.

You can move in any property market
You can move on whatever the market is doing. My advice is to ignore the housing market. It makes no difference whether prices are up or down as to whether you can move or not.

If you've been on the market for a while and you haven't sold, you have two choices. Stay on the market at a price that isn't working or take your property off. If you have been sitting on the market and not selling, the price you're hoping to get is not unachievable either due to market conditions, or your home not being effectively marketed. It's impossible for us to tell which category you fall into without seeing your home first.

You may be thinking: 'If I take my home off the market, how will I be able to move?' There are strategies we use that may be right for you.

Pass on your price reduction
Negotiation is key in a tough market. If you are moving within a few miles, you'll likely find that other homes have reacted to the market too, i.e. local prices are relative, fluctuating at the same levels. If so, then no one has lost anything, you can afford to accept an offer and pass the price-drop on. Here's how to do it: you're being marketed at £500,000 and get an offer that's 10% off the asking price, £450,000. If your ongoing purchase is priced at £750,000, there's nothing to stop you offering £675,000 on the basis that the market has shifted down by 10%. Often, when skilled staff control these negotiations, people shift their offers up after initial figures are thrown about and you could find you've not dropped your price so low after all.

Let-to-buy may be your answer
Maybe you're your home isn't selling or you'd rather wait until its market value improves. Perhaps you're already in a chain and your buyer has pulled out. You may be a family relocating and hoping to move during school holidays. A let-to-buy arrangement has become a common way to get movers unstuck.

Simply put,you draw down funds from your equity pot to use as a deposit on your next home, and leave some in your first home as a deposit for a let-to-buy mortgage. This way, you end up with two properties, one to live in and one as an investment. The first thing you need to know is your predicted rental income. This is what the buy-to-let mortage lender will use to assess your application. Our super-accurate lettings manager, Harris, could give you a valution figure in seconds (possibly over the phone). Call him on 020 3206 3063 or email him. There are also online valuation calculators that will give you ballpark figures instantly. This post outlines how to start the process and what you need to think about when renting out your first home.

How do let-to-buy mortgages work?
The let-to-buy mortgage lender will need at least a 25% deposit, and much like a residential mortgage, you'll get a better interest rate if you use a higher deposit. Say your original home is valued at £800,000 and you have a mortgage of £200,000. This leaves you £600,000 in equity (your profit). Usually people use this to put towards buying their next home.

If you switch your mortgage to a let-to-buy and aim to leave 25% deposit there, you'd leave £200,000 in your original property and the lender would issue a mortgage for the outstanding £ 600,000 that your tenants will be paying off. You'd pocket £400,000 that you can use towards a deposit on a new home. You new home's mortgage will be a residential mortgage and the amount you'll be lent will depend on your salary (your first property won't be taken into account). Affordability of the let-to-buy mortgage is assessed by the rental income you'd expect to get. Most lenders want the rental income to cover about 125% of the mortgage repayments. So, if your new let-to-buy mortgage payments are around £700 a month and your expected rental income is £2,000 a month, your figures stack up. Here's a useful calculator.

Bear in mind, you will need to pay a conveyancing solicitor and extra stamp duty for your second property. This stamp duty calculator shows you what you'd pay.

Take your home off the market to sell it.
If you're on the market and not selling, you need to know why. Is it the marketing or your price expectation? This is where you need professional advice. You need someone to have a look over your property's marketing material, portal statistics and, most importantly, to visit your home and talk to you. I've gone into why this can be a good tactic in detail here.

The housing market goes up, the housing market comes down. There's no reason why the market should hold your move up. Moving home is a big deal and should be an exciting landlmark in people's lives. If you focus on what you need from a move, you'll find everything else will follow.