Published: 16/03/2023 By Alex MaileIn the freezing conditions, it may take a while to sink in, but spring has arrived! There are already a few brave daffodils appearing and it won’t be long before the clocks go forward. The longer and brighter days also mean we are starting to come out of our winter hibernation and getting on with things. It’s traditionally a very busy period for the housing market.
And, this time around, it is not just winter the housing market is trying to shrug off, but some serious financial challenges, too. The cost-of-living crisis is finally starting to ease and so are mortgage rates. It’s a very slow process, but the main market indices, from Rightmove to Halifax, are all showing signs of an improved outlook. There is, though, likely to be one more 0.5% base rate rise, possibly even this month, but as it has already been factored into most lenders’ mortgage rates, it won’t have too much of an impact. After that, hopefully, it should start to come down, as well.
Our squeezed budgets, though, have taken much of the heat out of the sales market, so it is not a time to try a cheeky price and see how you get on. Properties must be priced competitively, right from the outset, or they will go stale very quickly. They will also tend to take a little longer to sell. There is no doubt, though, it is an opportune moment for buyers and investors. With supplies of new property increasing and prices softening, their budgets will stretch that little bit further, and, at the same time, they will have a better selection to choose from.
The rental market is reacting to the various financial pressures a little differently. Mortgage costs for landlords have gone up and as they cannot offset these fully against tax, many have been raising rents. At the same time, tenants are finding their budgets increasingly stretched by the cost-of-living crisis. However, the small falls in rents over the last few months suggest that they may now be close to the limits of affordability, especially in London.
Well, that’s all for this month. I’ll be back, same time, same place, in April.