Let’s get straight to the point – the past 14 consecutive interest rate hikes and the surge in inflation have left us feeling as pleasant as lounging on a bed of thorns. However, whispers from Propertymark professionals suggest that we might just be witnessing the dawn of a revitalised housing market.
Undeniably, inflation and interest rates still linger higher than in recent years, but we seem to have reached a juncture where we’re detecting “very early signs of forward motion again.”
The Present Property Market
While autumn ushers in darker evenings and colder temperatures, the property market seems to be experiencing an upturn. Pass us the pumpkin spice – if the good news continues, we might just opt for a double shot!
Recent statistics indicate that higher interest rates and reduced asking prices are coaxing more individuals to ‘swipe right’ on property viewings and make initial offers this year. The challenges of the cost of living persist, but the property market is gearing up for a new era of possibilities.
What has fueled this wave of optimism? The Bank of England’s decision to hit the pause button on those escalating interest rates! Major lenders like TSB and Natwest wasted no time, responding with notably positive moves. They’re not merely updating mortgage terms; they’re extending them to 40 years and cutting down mortgage costs! The aim? To create more opportunities, make the property ladder more accessible, and stimulate activity among buyers and sellers as we stride into 2024.
At Jacobs Steel, we’re confident about these developments and are already witnessing positive shifts in the local markets between Worthing and Brighton; with the number of properties listed for sale and those sold maintaining a consistent trend month after month.
Mortgage Rates
Over the past few weeks, we’ve observed a steady decline in interest rates for various fixed-rate mortgages, with some fixed mortgage deals dropping below 5% for the first time since summer.
Let’s pause and reminisce about the time when the Bank of England decided to freeze the base rate at 5.25%. It wasn’t exactly cause for a street party, but it was undoubtedly a welcome outcome following 14 successive rises since December 2021.
One of the first considerations when there are changes to the base rate is how it could impact mortgages. This concern is valid, considering that a mortgage is one of the most substantial loans people undertake, and fluctuations in mortgage costs can significantly affect one’s cost of living.
In response to the base rate freeze, Barclays, Halifax, Nationwide, NatWest, Santander, Virgin Money, and HSBC have all recently lowered their rates. This reduction in mortgage products, combined with the halt in rate increases, should instill confidence in the market.
The market remains volatile, and changes could happen again at the next Bank of England meeting. Therefore, stay tuned to the news and keep your trusted estate agents and mortgage advisors close to support you on your journey and secure the best deal moving forward.
Rental Market Review
The insatiable demand for rented properties continues, along with rising rents.
The chief executive of Propertymark, Nathan Emerson warned that recent figures detailing the number of properties that are available to rent show that it’s “drastically below what is needed to keep up with current market demand”.
We can point new landlords in the right direction about where to buy and also discuss the different management options available. Even experienced landlords need to be informed on upcoming changes in legislation and we are happy to answer any questions.
The Future of Property
The market is still active, and buyers are still buying. The big difference between now and the same time last year is that it has become a more ‘price sensitive’ market.
Looking back at last summer we saw situations whereby buyers were paying asking prices or in some cases ‘in excess of asking prices’ due to the shortage of supply and the very low cost of borrowing.
Fast forward to Summer 2023 and we are seeing potential buyers showing more caution and looking more at the price they are paying. Building Society Valuers are also being tougher on values, they are wanting more direct comparable evidence to support the prices being paid, in some instances they are ‘down-valuing’ which can have an impact on buyers’ mortgages and often result in renegotiation.
Price is key in any market, but more so just now, with interest rates as they are. Whilst we fully appreciate that it is hard to accept the value of your home may have fallen, it’s fair to say that any onward purchase will have fallen by a similar percentage.