Market Review

DSC_4225 - EditedThe Bank of England meet again on Thursday 2nd November with many mortgage borrowers keeping a closer eye than usual on the outcome. The hope is that interest rates will remain unchanged for the second time in succession which will restore some much-needed confidence to a fragile housing market.

The volume of available properties for sale is still increasing which dilutes every seller’s chance of finding a buyer. Prices over the past year have fallen but many sellers are still trying to achieve figures experienced in the artificial post Covid boom when interest rates were at a record all time low, coupled with a stamp duty holiday. The harsh reality is the majority of sellers will not move unless they reduce their prices to align with current market conditions.

Sales transaction levels are lower month by month compared to the corresponding months last year as buyers re-adjust to the cost of borrowing. As interest rates have risen over the past 22 months affordability has become more difficult, hence a lower level of sales and downward pressure on property prices.

On a positive note, over the past month some mortgage lenders have reduced their rates edging nearer to the base rate which indicates lenders feel they could be at their peak for the moment. Numerous borrowers fixed rate deals are ending and they are reverting to current rates in excess of 5%, this is going have a big impact on helping to reduce inflation.

The Government will announce their Autumn Statement on 22nd November with speculation that there will be help for first time buyers, something which is now needed to help build chains. It is unlikely that the base interest rate will reduce in the short term so an alternative incentive from central Government will be welcome. First time buyers have held back in recent months enabling them to save larger deposits, so with lower house prices and slightly lower mortgage rates on offer any incentive will be a great opportunity to get on the property ladder.

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