You will no doubt have been party to the recurring conversation among homeowners about “Following the massive hike in prices during the pandemic, will there be a property price crash?”
Despite media speculation, in our view, a crash is very unlikely to happen in the short term.
One of the little-reported reasons for this is because, counterintuitively, it is simply too expensive to move! Prices are ultimately only forced up or down by an imbalance of supply and demand. When the market is strong, and people feel bullish, they move - upwards. But when the market is “normal” and/or they feel more cautious, they do not.
However, many people simply could not afford to trade down because the cost of moving has become so high, particularly in respect of SDLT (Stamp Duty). For example, someone wanting to trade down from a £300,000 property to a £270,000 property would be virtually no better off than if had they stayed put, due to the various costs of moving, coupled with the typical improvements people make when they move.
So, if people choose to remain where they are, fewer properties than the market requires become available, potentially fueling further price rises or at least keeping the market in check.
The key of course is to avoid over-extending yourself initially. That way, you can sit back and not worry about house prices at all. It doesn’t matter what your property is worth if you don’t need to sell it! But if you do, you know who to contact!