Market Comment (June 2023)
There is no point in beating about the bush, the biggest news in the housing market right now is the latest increase in interest rates.
Some of the headlines of note include:
● The Bank rate has increased by 0.5% to 5.00%
● This is the 13th consecutive increase since December 2021
● The current rate of interest is the highest since 2008
● The vote from the Monetary Policy Committee at the Bank of England was 7-2 in favour of the increase
Nathan Emerson is the Chief Executive for Propertymark, and he said:
“It’s undisputed that homeowners and first steppers will be facing the consequences of rising interest rates as borrowing costs increase. However, with this comes a further shift towards more realistic and sustainable house prices down from the spike seen during the pandemic.”
"Confidence from sellers is undeterred with our latest data showing a 70% increase in properties available for sale compared to April 2022 and in turn, this is providing buyers more room for negotiation as well as more choice.”
For those on fixed-rate mortgages, this latest increase is likely to have no immediate effect, and for those looking for a new fixed rate, they should also see little change in the market offering due to it being already factored into banks’ pricing.”
“It is imperative that the UK Government urgently do more to support homebuyers and landlords with their rising costs, especially as interest rates look to remain high into the start of next year.”
The impact of this latest interest rates rise is discussed by Paul Broadhead, Head of Mortgage & Housing Policy at the BSA, who said;
“Most (mortgage holders) will see a significant increase in their mortgage costs, which will be on average around £176 extra a month for those with a two-year deal.”
With all other costs rising, this is a significant sum for homeowners to manage, and it also means prospective buyers have to seriously consider what is affordable for them when looking to step onto the property ladder.
This situation also significantly impacts current homeowners with respect to potential demand in buyers for their home, their ability to pay their current mortgage, and what they can afford if they arrange a new mortgage in moving elsewhere.
No matter the move you make in the property market, it is vital to make an informed decision. Now, this is even more true. As local property market specialists, we are on hand to discuss your situation, and offer guidance as best we can.
If you are a Leytonstone or London homeowner looking to sell up and move out of the capital, we are here to assist you.
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.
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