Market Comment (August 2022)
With households gearing up for the start of the new school year, and the rental market priming itself for the start of a new student year, things are changing in the housing sector. A return to seasonal trends in the housing market is welcome for many people after a period of uncertainty.
However, with further economic challenges coming to the fore, there are signs the market is evolving once again.
Increase in interest rates likely to impact housing market
With interest rates standing at 1.75%, the highest level in three decades, many housing market observers believe there will be a slowdown in the market. Capital Economics predict UK house prices will drop 5% between here and 2024.
Tim Bannister, Rightmove’s housing specialist, said: “First-time buyers trying to get onto the ladder are currently facing average monthly mortgage payments that are 20% higher than the start of the year due to rising interest rates and asking prices. As rates creep upwards and with the wider economy uncertain, people may look for some financial certainty by locking in longer mortgage terms before they rise again.”
Iain McKenzie, chief executive of The Guild of Property Professionals, said: “The consecutive interest rate rise could make potential buyers more hesitant about taking on a mortgage. If it does, we will likely see property prices cool off in order to entice more people to buy.”
Supply of property falling
A further indicator of what might come next in the housing market is seen in a drop in property listings. With the supply of property already failing to meet the demand of property, this is likely to be unwelcome news for buyers.
Of course, if the predicted drop-off for buyers occurs, there might be a downwards movement in both areas, so there might not be much of an overall difference in the property market.
Colby Short, Co-founder and CEO of GetAgent.co.uk, commented: “We’re starting to see strong signs that the heightened levels of market activity driven by the nation’s homebuyers is now starting to subside ever so slightly, most notably by way of a reduction in mortgage approvals. As our analysis shows, there has also been a reduction in market activity on the side of the nation’s sellers so far this year, with available stock levels dwindling quite significantly in some areas. Of course, with the market already suffering from a drought of its own with respect to available stock, a further reduction should ensure that the scales of supply and demand remain out of balance. As a result, property values are likely to remain robust despite the wider pressure of a cost-of-living crisis.”
Can we help?
If you would like to learn more about Leytonstone, what the area has to offer, and how to achieve your goals in the local property market, we can help. To arrange an appointment, call us on 020 8558 1147 or send us an email at info@tradingplacesproperty.com
You will find Trading Places Estate and Letting Agents at 46 Church Lane, Leytonstone, London, E11 1HE; and we look forward to assisting you.
Click here for an online Valuation (a starting point)
Click here for a Desktop Valuation (a more detailed option)
Click here to book a Home Visit Valuation (the full works)