Welcome to the June 2022 property market comment. (Scroll down to watch Richards video) The…
Here’s Richard’s Market Comment for May 2022.
As you may know, the Bank of England has just announced a further 0.25% increase in interest rates. That’s the fourth consecutive rise since December, when it was just 0.1%. It’s now 1%-still remarkably low. This rise was not unexpected and is no doubt a wise move to curb inflation which is predicted to top 10% by the end of the year.
Bear in mind that much of this inflation is caused by extraordinary and hopefully temporary factors such as pandemic-induced shortages and indirectly, the war in Ukraine. However, we enjoy high levels of employment and business confidence in the housing market remains really high. Yes, the market been incredibly buoyant, with average house prices up about 12% up on last year (depending on who you speak to).
But the key now is activity–a lot of people really want to move house but have delayed doing so because they simply couldn’t find what they were looking for. Although the rise in interest rates, coupled with the cost-of-living crisis will unfortunately hit some people incredibly hard, people still need to move house. The increase in the interest rate may mean that some people may have to buy a slightly smaller property than they had hoped, but it doesn’t automatically suppress house prices, as long as demand remains high–which it certainly is.Even if the number of our buyer applicants halved, which doesn’t look likely, there would still be plenty to go round.
Certainly the rate of house price growth is bound to ease over the coming months–that 10%+ simply can’t be sustained, in any environment, and it would appear likely that we’ll be returning to a healthy, mildly inflationary market of perhaps 3 or 4 percent by the end of the year. The issue now is confidence. We must be careful not to take any notice of the sensationalist tabloid headlines that are already starting to appear.
The fact is-interest rates are still incredibly low, demand remains remarkably high, mortgages are readily available, and as we are finding that more properties are now coming on to the market to satisfy that demand, it looks like a good summer ahead for anyone who might have been sitting on the fence. If that’s you, then now would be a very good time to act. Why not ask us to provide you with a Marketing Proposal for your property, when we can also add you to our VIP list where we’ll keep you up to date about properties that are just about to hit the market, before they are uploaded to the portals.
Watch Richard’s Video below: