According to Nationwide Building Society, house prices across the UK fell by 3.4% in May, which is the biggest drop since July 2009. The average home is now worth £260,736.
So, what does this mean for you?
Buying
Ready to move – People who have the funds to move and have been watching the market and waiting for house prices to either flatline or drop, should act now. There are slightly fewer houses on the market as some potential sellers try to wait out the price fall, but this means there is less competition and less pressure to make rash decisions.
First time buyers – or those looking for a new mortgage will have to consider higher mortgages which are being pushed up by rising interest rates. Analysts are predicting that the Bank of England will soon raise interest rates by as much as 1% in a bid to slow price rises which is causing mortgage lenders to push up fixed-rate deals or remove them from the market. The Bank of England reported mortgage approvals for house purchases fell by 5.8% in March and this downturn in lending is forecast to continue into next year. However, positively, mortgage rates are predicted to stabilise and, after these initial hikes, we shouldn’t see much more movement.
Despite the increase in mortgages, the fall in house prices can counteract this, and it could be worth buying at a lower price and paying a higher mortgage in the short-term.
Upsizing – If you are considering buying a larger property in the near future, with property prices as they are, it might be possible to get a more spacious home within budget now.
Renting – For individuals currently in rented accommodation and looking to buy, the lower house prices could make now a good time to buy. Rental prices are rising as landlords deal with their own cost increases, so paying a higher mortgage could work out better than paying higher rent.
Overall, as long as you have your finances in order, it’s a buyer’s market and the perfect time to find a home you love at a good price.
Selling
There is huge demand for homes right now and the number of property sales completing is on an upward trajectory. A rise in mortgage rates might be putting some people off moving, but this means there are fewer properties on the market and less competition, which ultimately means a higher chance of houses selling swiftly.
Although the lower selling prices seem like a hindrance, homeowners will still be selling for more than they would have done in 2020/21.
Whatever your position; whether you’re considering selling or buying, upsizing or downsizing, getting onto the property ladder or buying a commercial property, give us a call or email, or pop into branch to have a chat and see why now could be the perfect time for you.