The residential property market continues to seemingly defy all attempts to derail it by certain commentators and sections of the media that relish spreading doom and gloom and latching on to every negative news story that occurs.
Of course, the property market is not immune to both economic factors and changes in sentiment but adjustments in terms of property prices and transactional volumes have been noticeable but certainly not terminal.
Factors such as circa 150,000 people every month coming off of fixed rate mortgage schemes and having to negotiate new deals at higher interest rates, continuing high inflationary pressures and concerns in the global banking sector will all impact but the overall shortage of supply (still generally below demand) and more encouraging future forecasts are slowing any declines and may well see the market in the second half of the year move forward more positively.
The March budget focused largely on efforts to support getting people back to work (improved childcare provision and a lifting of the cap on taxable pension contributions) and there were no specific policy interventions for the housing market. The one potential negative that may affect housing was the increase in Corporation Tax which may affect developers and some landlords.
The outlook for the economy looks stronger with inflation set to fall quite significantly during the remainder of 2023. It will still be rising but at a much slower rate.
Industrial disputes in many cases look set to be resolved and losing the nightly pictures on the news of striking workers on picket lines will improve both the spending power of those involved, the tax take for the government and the general mood for most other people.
The last few months have been challenging and difficult for everyone. However, the vast majority have taken personal actions to mitigate their positions and survive. Planned moves may have been delayed but for a huge number of people, moving home is a necessity and these moves will continue.
Sensible pricing is key. In the same way as an auctioneer usually sets a “come and get me” guide price and creates interest that results in the best price being achieved. The same approach in the second-hand sales market is seeing good levels of interest being generated and agreed sales prices that reflect and adjustment from the peak of early 2022 rather than a market crash.
There are many local factors that affect house prices and saleability and the need for experienced professional advice has never been more relevant or valuable.
The emergence in recent years of online estate agency models that grew based on slinging property details onto the internet and hoping is, thankfully, coming to an end with several of the major names in serious financial trouble and unlikely to survive in their present form.
The saying that there is no such thing as a “free lunch” and that “if you pay peanuts, you get monkeys” is true. It has never been more important to undertake your research on who is best placed to act on your behalf.
The lettings market remains very strong. Rental values are high and the availability of stock is low with more and more tenants choosing to stay put at the end of their existing agreements rather than face the uncertainty of finding alternate accommodation.
Author
Michael Day MBA FRICS FNAEA FARLA
Managing Director Integra Property Services
