If you take any notice of the media, then it would be hardly surprising if you were confused about the property market. Some of the sensationalist headlines are shocking - that’s what they are designed to be of course!
Yes, there have been stories of buyers who have had to reconsider their finances and, during the shock of the Liz Truss debacle, some did indeed pull out of their intended purchase, due to higher interest rates affecting affordability. And this is sad, especially when it affects the plans of those involved in a whole chain of related transactions.
However, there are two angles to this that should provide a degree of comfort if you are currently selling or thinking of selling. Firstly, if you pick up a newspaper from say a year ago, you’ll find that the headline then was that the number of buyers massively outstripped the number of properties available, by a ratio of about 12:1. Many would-be sellers were hesitant to list their property for sale as they were worried that they might not find anywhere to buy. This imbalance of supply and demand put serious upward pressure on house prices, which we all suspected was probably unsustainable.
What we are seeing now is simply a rebalancing - a correction as it is sometimes called. But don’t misread the situation – there is still substantial demand from all but those at the sharp end of the mortgage issue. Not everyone has a large mortgage, and there are some very creative financial solutions on offer as well. In fact, we rather prefer the current landscape, where there is still a very healthy, but not overwhelming level of buyer demand.
The second encouraging aspect is the improved quality of current buyers. It seems that higher interest rates have shaken the tree a bit and what we have left are well-qualified buyers for whom interest rate increases are unlikely to change their plans, even if they do buy a slightly cheaper property. There may be fewer speculative buyers, there are still plenty of people who are ready willing and able to move for real-lifestyle reasons; Jobs, children, marriage, divorce, debt, downsizing, death, etc.
Certainly, it’s not the market for overly-ambitious pricing - everyone knows that; after all, you’ll need to compete with an increasing number of other properties for sale, although, to be fair, we are still securing some excellent figures for our clients. And it’s interesting to note that the number of properties, nationally, showing a reduced asking price on Rightmove, is about the same as it was pre-pandemic.