Behind a backdrop of negative media rhetoric surrounding the UK property market, 2023 has seen a remarkably resilient sales market, albeit at a slower pace. In contrast, the lettings market has been frenetic, with a lack of good quality housing available, unable to meet the growing and unrelenting demand for such.
Sticky high inflation and historically high interest rates set by the Bank of England have dominated the landscape this year, and official figures show falling house prices and spiralling rents.
So, what is happening in the market today?
Overall, the sales market has been active but subdued this year. Research shows that year to date across the country, there have been some 680,000 sales agreed in 2023, compared to 900,000 at the same point in time last year.
The sales market usually rebounds after the summer break, something we have yet to see materialise. It is fair to say that the market today is becoming increasingly hard to navigate as winter takes hold across the Midlands.
I take the view that ongoing negative press articles haven’t helped the market but should be considered in context. For example, sellers are still today able to achieve considerably higher values in comparison with pre-Covid times, dousing claims of a ‘falling prices’ market beyond a sensible readjustment of achievable prices following a frenzied and overheated post-lockdown market.
Will my house sell in today’s market?
The key to achieving a successful sale now is to consider your product, marketing pitch, and specific pricing point.
Properties are selling, but there is no room for sellers to be complacent with either the presentation of their home or to rely on outdated marketing to achieve a result. Pricing is once again critical to achieving a sale.
When is the best time to sell my house in the medium term?
A question that we are being asked frequently, timing is also essential to achieving success. It seems that the period of low-cost borrowing is over, certainly for the near and medium term. This may beg the question, will the market ever pick up from its currently subdued state, or is this the ‘new normal?’ In my opinion, the answer can only be yes, the market will pick up.
It is all a case of supply vs demand, and as a result of overall slower activity in the market since the ‘mini budget’ 14 months ago, we are starting to see a growing appetite from both buyers and sellers, most of whom in turn are looking to buy onwards, as the public take the decision not to put their lives on hold forever.
At a point in time, growing appetite is likely to outweigh restrictive factors, driving the market forward and, in my opinion, at a strong pace. As a result, we are likely to see considerably more activity from buyers in the new year and I would advise a client selling their home to strongly consider a ‘new year 2024’ launch.
What factors can have an effect on my move if interest rates stay high?
All eyes should be focused on official inflation figures and the upcoming Autumn Statement or ‘budget’. It is widely thought that inflation levels will drop considerably between now and the end of the year, perhaps to under 4%. If so, interest rates won’t be the only driver on property prices and the market.
I am hopeful that lower inflation and lower government borrowing than expected will give the chancellor some ‘room to breathe’ in his autumn statement. As a result, expect to see either the announcement or future promise of some positive housing policies aimed at stimulating construction, home ownership and the housing sector. With a general election around the corner, the government will, in my opinion, be keen to provide a stimulus and some much-needed positivity.
Of course, any announcement has the potential to have an immediate effect on the market conditions despite the time of year, so any sellers in the market today should be careful and not jump to decisions regarding their marketing in the interim.
Is now the time to buy, or will prices keep falling?
Of course, a crystal ball would be useful in trying to answer this million-dollar question! In real terms, property prices being achieved are 10-15% lower than at the absolute peak of the market 18 months ago. Taken in context, on average, buyers are paying 10% more for a like-for-like property than before Covid three and a half years ago, a statistic that underlines the resilience of the property market. It is absolutely my opinion that now is the time to buy, ahead of widely anticipated growth recovery at some point over the next 18 months.
I am a landlord, and my costs are spiralling. What options do I have?
In many cases, and contrary to popular belief, we find that many landlords favour solid, reliable tenancies and happy tenants over increased rental income.
As a result, and with interest rates having increased so substantially over a short period, many tenancies have become quickly outdated, with rental income well under open market value.
If you find yourself in this position as a landlord and your costs are becoming unsustainable, take professional advice. Sustainable tenancies require realistic tenants and landlords, and an experienced, commercial, but empathetic agent will be able to appraise, advise, and negotiate sustainable terms between you and your tenant.
There is every chance that we can help your investment return to or stay on a sustainable footing for years to come.
At Smiths Property Experts, we are a small team of focused, proven, and experienced professionals with almost 100 years of combined experience in property sales and lettings. We provide tailored and bespoke services to meet the needs of our clients, whether you are a seller, landlord, buyer, or tenant. Our services include revisiting your mortgage offering or investment portfolio, as well as assistance with letting, selling, buying, or renting property. We are committed to helping you navigate the market with our hands-on experience and understanding.