Despite the poor weather the traditional Spring housing market appears to have come to life after a very up and down first quarter to the year. April has seen more sellers placing their properties on the market and more buyers have been purchasing, so activity is up on both fronts.
The stability of interest rates and talk of a potential rate reduction has helped to restore confidence, however, some mortgage lenders have raised their rates in recent days following speculation that the Bank of England is not quite ready to reduce the base rate just yet.
The housing market will certainly benefit from lower mortgage rates to assist the many potential buyers who are unable to enter the market due to affordability. There are still many house movers who do not fit mortgage lenders criteria and are blocked out of the market; these house movers are sitting in the wings waiting.
The market needs more buyers as there is still a large choice of surplus housing stock available to purchasers. Despite a good April for sales, more properties still came to the market than were sold which means the choice of properties For Sale is continuing to rise. This doesn’t help those sellers who have been on the market for a few months with little interest.
Many sellers are still having to reduce their asking prices to stimulate viewings after overpricing at the outset. We are seeing estate agents over valuing properties to win business and some sellers are inflating the asking price above the valuation price hoping they will be “lucky”. In both scenarios the properties normally don’t sell and will be reduced or withdrawn completely.
Locally, the number of brand-new housing developments is providing huge competition to the second-hand market, new plots are being released at a rapid rate each week with the majority offered with incentives that the second-hand market cannot offer, these new properties are not helping to reduce the surplus number of properties For Sale.
We hope May will continue in a similar vein to April but a key date to look out for is 9th May when the Bank of England meet again, the housing market and all mortgage borrowers will be hoping the time is now right for an interest rate reduction?