The month of June has proved to be a difficult month for the property market. The cost of mortgage borrowing is limiting activity as first time buyers, in particular, are being priced out of the market by higher interest rates. Despite the Bank of England holding rates at 3.75%, many first time buyer two year fixed rate mortgages are over 5%, they peaked in March at 5.90%
According to the property portal Zoopla, 60% of properties listed for sale since January remain unsold, this is due to a combination of a lack of buyer demand and overpriced property. They also report that agreed sales are 11% lower in the East Midlands so far this year compared to last year.
The conflict in the middle east has also un-nerved many potential home movers due to the rising cost of living and political turbulence in the UK has not helped to restore confidence. Stability is now needed for a period of time so that mortgage lenders reduce rates to more moderate levels.
The hope in the short term is that mortgage rates become more competitive and the Bank of England reduce the base rate when they meet at the end of July, affordability and confidence are currently the two ingredients to an active market.