Tessa Milner of PFK Carlisle examines the conflicting forces that are affecting the property market in the run-up to Christmas.
The property market is showing signs of change, and this can hardly come as a surprise to anyone, as so many other things in our lives are changing almost on a daily basis – the prime minister, government policies, mortgage interest rates, the cost of living, public and commercial confidence.
How is all this change affecting the property market? Well, it is actually less than one might think. The evidence PFK have seen so far seems to point to a swing from a strong sellers' market to a moderate buyers' market. Moderate because there are still powerful but sometimes opposing forces at work, such as low numbers of properties on the market, and therefore this will keep house prices reasonably buoyant. This lack of supply could well be the economy at work, but with Christmas on the horizon it could also have something to do with the time of year. So, we will see a more accurate picture in the new year.
PFK are seeing active buyers want to keep hold of their mortgage offers and see through their purchases, rather than risk re-applying at higher interest rates. But, over time, higher interest rates will become the norm and bring new pressures for most, including many thousands of homeowners coming off fixed-rate mortgages next year. But we should remember that interest rates are still below the thirty-year average.
The energy crisis might encourage some homeowners to lower costs by downsizing, thereby bringing larger properties onto the market. But many first-time buyers will have to wait longer until they have enough money to afford higher mortgage costs, so this could create a logjam further up the property ladder.
The property sector and housing like all businesses need stability. We have had a different housing minister nearly every year since the start of this century and five in the past two years some of which differ in opinion regarding reforms in the property sector. So, for a start, I hope our new prime minister tries to keep a housing minister in place for the next few years so clear instructions can be given to the property sector.
Despite all of the above, buyers are buying, and sellers are selling. Life does continue, and the property market is undoubtedly functioning as it should in these circumstances.
PFK has been operating for over 146 years and is both RICS, HMRC and Property Ombudsman registered that means we are completely up to date with latest compliance in relation to property and land so that we can provide our customers with the correct guidance, highest level of service and ensuring the best scenario is achieved. We have a team of local people with a wealth of knowledge in all types of property and markets so if you are thinking of moving then contact your local branch to speak to one of our property experts.