Why it's vital not to over value your property

'House prices could drop 10% next year, Capital Economics forecasts'. This is the headline that dominated the press last week.

So how could this impact the housing market?

At a time of house price adjustments, it is vital to make sure sellers price their homes correctly from the outset, as getting it wrong could mean that their home could stay on the market for a long time, which could have a massive impact on the final sale price.

For example if you put your house on the market for £280,000 now, and it was an over inflated price, then for each month your house stays on the market it could loose an additional 1% per month. If house prices do fall by 10% over the next year as forecast by Capital Economics, and you don't manage to sell your house, then you could potentially loose that amount from your sale price.

If you are buying into an identical market, then it's possible that another house you are looking to buy could drop too. However if you are in a hurry to move, or if you are moving out of the area then it would be a good idea to make sure that your house is correctly priced from the offset.

It's true that prices in certain geographical areas can be effected less than others. For example houses closer to London, where demand outstrips available houses, will always stay higher. Houses in more sought after locations will always demand a slightly higher premium than some others.

Sellers may also wish to sell now and take advantage of buying back in at a lower level if prices do fall.

If you are a first-time buyer, currently renting a property and waiting to see if house prices might fall by 10% over 2011, this could also have its risks. House rental prices are set to soar in 2011, as demand outstrips supply, plus with interest rates being at an all time low you could be putting your money into buying your own home, and not your landlords. However if you wait you might be able buy in at a lower price.

Buying and selling a property can be a bit of a mind field, so why not ask us, the property specialists. Contact us today @ http://www.intercounty.co.uk