The first six months of the year have certainly been tougher for the housing market than expected, as we began the year there was optimism that the market would be more buoyant than it has proved to be.
The general feedback we hear from both buyers and sellers relates to lack of confidence, mainly in the economy, government and issues in the wider world. It feels that first time buyers are short in supply, reluctant to enter the market for all of the above reasons and also fears of affordability.
Despite interest rates edging down, lower rates are still needed to stimulate more activity. The Bank of England have suggested rates will reduce further in the second half of the year and this will be welcome by both first time buyers and existing home owners. Many people are currently still enjoying sub 2% fixed rate mortgage deals which are due to end within the next year or so, so a jump to approximately 4% will be a shock to the system and difficult to afford. Rates moving towards mid 3% will soften the pain and potentially help existing home owners to move within the market encourage more first time buyers back.
The over supply of property has also proved to be a problem this year as month-by-month more properties become available for sale than those being sold, this has compounded to the point where there is more choice of property to buy now, than in many years. Within a five mile radius of Wellingborough there are currently over 1,800 properties for sale, this has enviably put downward pressure on house prices.
Properties are still definitely selling, it’s all about the correct asking price and quality marketing, the properties that are over priced are being left on the shelf. So far this year, according to Rightmove data, 1,183 sales have been agreed in the postcode sectors NN8, NN9, NN10 & NN29. This illustrates that there is steady activity in the market.
We look forward to the second half of the year with optimism hoping that the economy and world events will settle down and the Bank of England will ease rates down a bit further.