Published: 21/09/2023 By Alex MaileIt’s autumn. The leaves are just starting to turn and the holiday season is well and truly over as we head back to work and school.
In compensation, we have at least had a bit of an ‘Indian Summer’, although it looks like it might be coming to an end now. Talking of turning points, it seems there might be one coming in the property market (and the economy) soon, too. It has been almost exactly a year since Liz Truss’ disastrous mini-budget and, after a brief rally with the arrival of Rishi Sunak, inflation, interest rates and rents have soared, and property prices and sales have fallen. Now, that all might be about to change because, after 3 consecutive months of falling inflation, the Bank of England appears to be finally getting it under control.
In the meantime, fortunately, the housing market has been holding up surprisingly well. Prices have come down, but by less than 5% from their pandemic peak and they are still up by around 20% when compared to more normal 2019. There is, though, the possibility of one more rise in the base rate this month, bringing it to 5.5%, but it had been predicted to go considerably higher, which could have had far more serious consequences for the housing market.
As with all these things, the improving outlook won’t have an immediate effect. Instead, confidence will slowly return as the cost-of-living crisis eases and the base rate stabilises. Mortgage rates have already started to come down, with the best 5-year fixes dropping below 5% for the first time in many months. That should offer some much-needed encouragement to the many buyers who have reportedly been sitting on the fence. It’s also good news for tenants, as landlords have been hit hard by rising mortgage rates, with many forced to raise rents in order to cover their additional costs.
On the subject of lettings, as you probably know, this is one of its busiest months of the year - the phones are ringing and people are moving, so I had better go. Feel free to give me a call, though, especially if you need some up-to-date advice about putting a property on the market. If not, as usual, I’ll be back again next month.