Just what is going on!?
It’s been a great end to the week here at Wallers… or, more to the point, a great start to February!
We have just taken our third new sales listing – two of which went live already, one of which gets photographed next week; we have two new lettings listings; five new lets agreed and into referencing since Feb 1st, three of which are fully managed; another two sales listings hopefully dropping over the next week – we will see… and then, to pop a cherry on top, as I sat here typing, a call from our Swindon team to say that we have agreed an asking price sale on a property there, too!
I don’t say any of this to brag, I really don’t – there are many, many agents doing waaaay more numbers than these. The point I am making is that the property market is genuinely buzzing right now – I don’t care what anyone says.
Yes there are challenges, I don’t deny it, and yes I know prices are sliding… but I have been banging on about that coming for a year. But that was hardly Nostradamus level forecasting, it was just seeing a bizarre growth line in property prices that was never going to sustain itself. I also recognise that some people are going to feel a punch in the mouth if they are coming out of very low fixed rate mortgages onto now weighted SVRs, or remortgaging onto relatively higher rates.
But look – things can be done to manage all this, with a little thought; mortgage terms could be extended this time round, to soften the blow…. and then reduce the term again next time if rates have dropped; use the massively increased equity to get proportionately better mortgage rates than last time; or, cancel the membership of the gym you never go to and stop having avocado on toast for a couple of years… oh, sorry… went a bit Kirstie Allsop there for a moment, must behave myself… but in realistic terms, there are things that most mortgaged households are actually able to do to smooth out their increased outgoings… I know, because we have done it ourselves (although, seemed to replace things with more after school clubs and activities, somehow…).
The headlines yesterday about the BoE increasing its base rate are true, but there is extra context that paints a very different story.
Base Rate is up, but mortgage rates are coming down.
Inflation is high, but expected to tank over the course of this year.
The threat of recession is ever-present, but now they are predicting shorter and shallower… and they were already predicting shallow.
Economists now hedging their bets on any more base rate rises at all (although I would suggest probably to expect another quarter percent – maybe not next time, but the meeting after… and then, I think, that might be it).
Stats show property market activity to be in line – or perhaps, dare we believe, even more buoyant – than in the same period in other years within the last ten, since we escaped the depths of the last financial crisis.
And remember, getting syntactical and semantical about the whole affair, that this is a crisis, perhaps (although, I’d say even that term is questionable, from a property market point of view, outside of the cost of living crisis), but it is not a crash. I know some commentators are talking about 30% drops in property values… I cannot see the evidence for it, and to be honest, if prices do fall 10% over the next 12 to 24 months, the market can withstand it… but if I had to stick my neck out, I would look at 5% to 7% drop – perhaps overall – and prices picking up again before the end of this year, as we come out of a naturally quiet summer. In fact, I would say that if the base rate does go up to 4.25%, it might well be nudged down again during the last quarter, to stimulate the economy as it grows itself out of the barely-recession it finds itself in.
In the meantime, mortgage lenders will continue to provide solutions (as I said about this time last year, look out for the return of the Tracker Mortgage!), and based on our current enquiries, the property market will continue apace, alive and very much kicking.