Market Comment (May 2022)
We are moving towards summer, but if you are looking for rays of sunshine in the UK housing market, you’d be forgiven for digging out your umbrella. This month’s market comment is understandably focused on the latest interest rate increase from the Bank of England.
Another rise for interest rates
On the 5th of May, the Bank of England Monetary Policy Committee voted to increase the Bank of England base rate to 1% from 0.75%.
In a statement, the Bank of England said; “The Bank of England can’t do anything about the global supply problems or the energy prices that are currently pushing up inflation. But we do have tools to make sure inflation comes back down to our 2% target. The main tool we use to bring inflation down is to increase interest rates. We raised the UK’s most important interest rate (Bank Rate) from 0.1% to 0.25% in December 2021, to 0.5% in February 2022, and then again to 0.75% in March.”
Of course, the most important aspect of the statement was the increase to 1% and what is likely to happen in the coming months and years. The Bank of England statement continued by saying; “This month we have raised Bank Rate to 1%. We expect inflation to fall back next year and be close to our target in around two years. We may need to increase interest rates further in the coming months. But that all depends on what happens in the economy. In particular, we will be watching closely what is likely to happen to the rate of inflation in the next year or two.”
The threat of further interest rate increases is concerning for people who are already questioning their ability to move in the market. Of course, moving quickly and obtaining a fixed-rate mortgage might be a solution worth considering. Anyone looking for advice on their next move is advised to speak with a mortgage broker Fee Free Mortgage Advice
Even with the latest changes regarding interest rates, there is still interest in local property. We are dealing with interested buyers and potential sellers looking for guidance.
Uncertainty causes chaos for market observers
It is fair to say that no one knows for certain what will happen next in the property market; you only have to consider the broad range of headlines in the daily newspapers:
· On the 15th May, the Telegraph ran an article entitled “Don’t be surprised if house prices drop 20%”.
· On the same date, the Express had a story entitled “Incredible reason why house prices WON’T crash this year”, although to be fair, the reason was the high demand for homes, something which has been present for some time in the UK housing market.
· On the 16th of May, the Daily Mail highlighted that more than house prices are still rising.
With these outlets scrambling for clicks and page views as opposed to concerning themselves with informing people about what is happening, it’s best to leave property market advice for the experts. At Trading Places, we admit these are unique times in the housing market, but we have been through many peaks and troughs before. We aim to provide you with the best level of service and guidance, no matter what move you wish to make.
How is the local market performing?
Locally, providing the price is right, properties are still selling, and buyer demand is high, houses and garden flats in particular, and it’s a similar story for lettings, with a high demand for good quality rental accommodation. As well as a lack of supply, more and more buyers and tenants talk of the energy price situation, and as the government promise to roll out their support scheme, and with the next price cap review just a few months away, everyone is asking whether this will enough.
Can we help you move in 2022?
If you would like to learn more about Leytonstone or the surrounding areas and have a property you are thinking about selling this year, we would be more than happy to help.
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)
You will find Trading Places Estate and Letting Agents at 46 Church Lane, Leytonstone, London, E11 1HE; and we look forward to assisting you.