Reasons to be positive about the property market
- House prices show modest summer increases in Kirklees, despite falls nationally and in other regions.
- Interest rates unexpectedly held at 5.25% on September 20.
- Some key lenders have reduced their mortgage offers as a result.
- Demand is still there.
First of all let’s look at the national picture. We’ve come a long way since the ‘fiscal event’ of September 2022 which resulted in 14 consecutive increases in interest rates by the Bank of England, all of which has had the inevitable knock-on effect on demand for everything - from food and clothing to big ticket items and, of course, the biggest one of them all, property.
Clearly it’s been a challenging year for many, with the value of peoples’ largest single asset, their house, starting to fall. According to the latest house price survey from Nationwide, UK house prices in August fell at their fastest rate since 2009.
However, there are some elements of good news.
Here in Kirklees, we’re one of the few areas which, according to property house price website Twindig, saw a slight increase in prices during the height of summer. As you can see from their July report on the hottest and coldest property areas, Kirklees, along with Leeds, saw a 0.9% increase in house prices, with each location seeing respective average increases of £1,710 and £2,120 in average property prices.
September’s fractional drop in inflation also led to the unexpected decision by the Bank of England to hold interest rates at 5.25% in their last announcement on September 20 - contrary to predictions of another rate increase.
With affordability one of the key influences behind driving demand, Wednesday’s stand still on interest rates was great news - and resulted in a number of key lenders, notably TSB, Nationwide, Virgin Money and NatWest, reduce their mortgage rates, Nationwide is now offering fixed 5 and 10 year deals at 4.94%.
With inflation now moving in a downward direction, various economists are showing cautious signs of optimism - predicting that interest rates could peak in 2024, with a dramatic fall in 2025. According to Paul Dales, chief economist at Capital Economics (one of many market observers) interest rates could fall to 3% in 2025.
So what’s our take on all this?
- There’s still a healthy supply of buyers looking for property - and value for money is their top priority.
- Regionally we do appear to be bucking the national trend.
- If you’re selling a house to a first time buyer they will inevitably be cautious - and will be sensitive to over-inflated valuations. Value for money is everything at times like this.
- Verifying the financial strength of your buyer, and their genuine commitment to purchase, is more important than ever.
- Being tempted by unrealistic valuations could lead to browsers not offers.
- We’re here to get you moving - so we’ll be both honest and realistic.
There’s no denying that both the property and mortgage market are going through a challenging time. Weaker demand and issues of affordability have taken their toll. But we’re still selling houses, and we’re still seeing a good level of inquiries from buyers. It’s all about being realistic.
So, our key piece of advice if you’re selling is to get a professional valuation from us based on accurate market data and an honest assessment of current market conditions. We pride ourselves on our straight talking approach to all aspects of property transactions, and nowhere more so than valuations.
We‘re here to help all our clients move - whether it’s upsizing, downsizing or consolidation - with realistic valuations based on our expert knowledge of the local market.”
Thinking about selling or moving? Then call Max (Holmfirth) or Oliver (Mirfield) today to talk about your next property move.