When we hear that house prices are falling, the instinctive reaction is often concern. But depending on your situation, falling prices aren’t always a bad thing. If you’re planning a move, whether you’re upsizing, relocating, or simply changing postcodes, a dip in the market might open up some opportunities.
Here’s how.
A Closer Look at Upsizing in a Softer Market
Let’s say you’re selling your current property for £500,000 and buying a new home for £1 million. If the market drops 5%, the value of your current home would fall to £475,000. That might feel like a loss on paper. But your new, larger property? That also drops 5%, down to £950,000.
In this scenario, you actually save £50,000 on the upsized property, while only losing £25,000 on your existing one. You’re effectively spending less to make a bigger move. In the right scenario, that can tip the balance in your favour.
Stamp Duty Could Be Lower Too
Since stamp duty is tied to your purchase price, a lower market value can reduce the bill. In this example, that’s a potential £2,500 saving.
To illustrate:
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Stamp duty on a £1 million home (as a second-time buyer): approx. £41,250
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Stamp duty on a £950,000 home: approx. £38,750
It’s not a game-changer, but it’s worth factoring into your overall budget.
Other Moving Costs Might Come Down
Since many moving costs, like estate agent fees, are calculated as a percentage of the sale price, you may find your overall spend is slightly lower when values dip.
It’s another small detail that can help make a move more manageable during a slower market.
Should You Wait for Prices to Rise Again?
For upsizers, waiting might not pay off. If the market recovers, larger properties often bounce back in value more sharply than smaller ones. That means the price gap between your current home and your next one could widen.
Of course, timing the market is never an exact science. Still, it’s worth thinking about how movement in both directions could affect your plans.
Things to Consider
Before deciding to move in a shifting market, it’s worth asking yourself:
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Will you be buying and selling in the same conditions?
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Are you moving to a higher or lower price bracket?
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How long do you plan to stay in your next home?
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What’s your flexibility on timing?
A Final Thought
Falling prices don’t automatically spell bad news, especially if you’re trading up. But it’s not one-size-fits-all. Speaking to someone who understands the local market can help you figure out what makes sense for you.
We’re always happy to offer advice, no pressure.
Article by Andrew Overman | Partner | Location Location East
