As we move into the summer period it was expected the housing market would be in a better place and showing stronger signs of recovery following the difficult summer of 2023 when the Bank of England base rate was 5.25% and mortgage rates higher.
The cost of borrowing is today certainly more affordable with the base rate now at 4.25% and some fixed rate mortgage deals available under 4% but it appears the market is still struggling with confidence.
The lack of confidence in the economy and the nervous political situation, which was highlighted recently during the Council Elections, is overspilling into the housing market. New house movers are holding back, waiting for the political situation and the general economy to improve. First time buyers are particularly short in numbers which restricts subsequent sales and chains being generated.
Whilst the market is struggling with confidence new sellers to the market are still tending to price their properties boldly with an expectation of achieving a sale quickly at a price well above those that have been on the market for months and not sold. The housing market locally feels like it is confused?
The disparity in pricing is quite extreme and expectations are unrealistic; is this because of the greed of the sellers or the overvaluing by estate agents? Either way, properties are not selling at the pace required and some local estate agents over the past month have reduced the price of over 10% of their available properties in the hope of generating more activity. At the moment, the competition to sell is fierce with fewer actual buyers having a vast choice of properties at varying prices.
If the Bank of England reduce interest rates further through the summer, this will help to restore some confidence but at the moment it seems to be a more national or even global issue which will probably require time to resolve.