Changes in leadership of the country, mini budgets causing turmoil and increasing inflation driven by energy prices make for challenging times in the housing and mortgage markets.
The latest change in leadership has led to fiscal experts predicting that interest rates will not rise as sharply as predicted a few short weeks ago in the immediate aftermath of the min budget.
During this period of uncertainty, as a Liverpool estate agent, we’ve valued more houses since the beginning of September than in the same period last year which may just mean that the housing market keeps moving as one of the main reasons for chains falling through this year has been the lack of somewhere to move to for someone in the chain.
For those committed to moving there are more houses on the market now as people reconsider their options. New house builders are facing challenges with increases in raw materials, we still have a housing shortage in the UK so the housing market will continue to have volume.
Lloyds Bank published a report this week stating that across the UK house prices are predicted to fall by 8 percent in a year, with Credit Suisse a fall of 5 % there are many different opinions in the market, in a market where most transactions have a buyer and a seller it’s not too dramatic. None of the predicted market adjustments will wipe out the increase in house prices post-Covid which reduces dramatically the negative equity challenges we had post-2008.
The number of people facing negative equity will be low as In the short term most people are protected from the change in interest rates currently, 77% of homeowners are on a fixed rate mortgage, and of those whose mortgage commenced in 2019 that figure rises to 96% according to ukfinance.org.
Our experience in the past two years is that around 45% of new fixed-term mortgages have been for 5 years which means that for a significant percentage of homeowners the current unprecedented changes will not impact them for some time.
The qualified advisors within Rightclick Finance have all experienced both good and challenging markets, they all deal daily with lenders big and small in matching your requirements with the best interest rates and terms currently available. They’re experienced in set up fees, surveys, timescales, and the flexibility of products which in a market is becoming increasingly fluid and complex in products is invaluable.
House price increases since Covid have been strong, and the change in circumstances will stall this growth, there are so many experts predicting decreases, stability, and volumes dropping all varying incredibly which highlights the uncertainty in the market.
The good news for those committed to moving is that there are more houses on the market now as people reconsider their options and that lenders are beginning to feel confident in bringing new products daily back to market as opposed to the panic following the mini-budget.