At present it seems, both buyers and sellers are navigating their way through a quite bewildering range of different interpretations of the “state” of the local and UK housing market. The sensationalist “hype” perpetuated by the media (social and otherwise), with it’s prophecy’s of doom about the imminent collapse of the UK housing market, would have all,but the most hardened seller and buyer, grabbing their tin hats and running for their bunkers to shelter from it all! However, we need to understand that the media are always looking for readers and attention, so their “slant” on everything, will invariably be based on the philosophy that “bad news sells best”!
The reality is things are not nearly as bad as many think, so the sales team at Lextons thought that we should provide some much needed balance to the debate, based on our experience at “ground level” in the local property market.
Following the high octane housing market’s of 2021 and 2022, which witnessed demand outstripping supply and multiple viewings leading to multiple offers on property of all kinds and a sustained increase in property prices, it was inevitable that a “correction” of sorts was likely. This was provided by the inflationary effects of Brexit and the war in Ukraine and was crystalized by the disastrous “Mini Budget” produced by the ill fated Liz Truss on 23rd September 2022, when in our view was the date when the direction of the property market officially changed.
At this point there were predictions that the base rate would go over 6%. At this time we saw most lenders pull their rates and present new ones which were 6-7%. Some of these new rates were over 4% above the base rate which was an unheard of differential. We also saw high risk lenders restrict some products. This was followed by intervention from the Bank of England to help stabilise the economy but it was only recently in an interview with Andrew Bailey, Governor of the Bank of England, that we received a prediction as to where they believed rates would peak which was at 4.5%.
The good news for all buyers and sellers is that this has injected some much needed “balance” to market perception as borrowing rates have now been falling for some weeks with new products being released into the market giving more choice in the process.
Even following the most recent rate increase on the 2/2/23 we have seen rates continue to decrease and are now consistent with historic base rate differentials. Lenders are again confident to lend money to all customer situations and are working to quick timescales in order to agree mortgages and issue offers.
Commentary on the “National Picture” in market commentary, indicates a “soft landing”for the housing market this year, with some predicting small falls while others suggesting actually a modest increase in prices.
At Lextons however, we are obviously focused on the “local” picture for the property market in Brighton & Hove and the indicators are very encouraging. Against the back drop of falling borrowing rates a lack of available property stock has always characterised the local property market as the area is relatively small with the South Downs and the sea surrounding a modest land mass in between. Although the level of available homes on the market has increased slightly since the end of 2022 this is unlikely to provide much additional choice to those buyers hoping for a rapidly expanding element of “choice” in their property search!
We know also, that there are still a relatively high number of buyers who moved out of the London area last year into temporary accommodation, hoping that market conditions would play into their hands in 2023 who are now fully focused in finding a new home for their family, rather than “treading water” in temporary accommodation.
On balance we are expecting an active although more “stable” property market this year, but one that should offer confidence to all our clients and customers to make their dream move without the untold pressure and anxiety that has characterised the last two years.