As we reach the Easter period the residential property market is seemingly ebbing and flowing between signs of optimism and some elements of caution and concern.
Certainly talk of a collapse in house prices seem way off the mark with recent indices showing that prices, whilst down a few percentage points over the last year, remain resilient and, with hopes of reducing interest rates on the near horizon, there are clear signs of positivity around.
Providing some balance to this position are concerns over affordability, particularly amongst the 150,000 mortgage holders whose low fixed rate schemes are ending every month and who are facing significant uplifts in servicing costs.
Interest rates are a huge driver of both sentiment and activity in the property market and with inflation figures falling at a faster rate than forecast (the latest figure was 3.4%) the Bank of England will have to make the judgement call as to when to adjust the base rate (currently 5.25%). They need to balance the desire to get inflation below 2% per annum with providing the incentive for businesses to invest and stimulate economic growth.
In March the Monetary Policy Committee of the Bank of England decided to hold rates at 5.25% but did give a steer that they expected rates to fall with the expectation that this will be in the summer. This will be music to the ears of the Tory Government who are facing the challenge of a General Election later in the year and need all the help they can get if they are to avoid a potential whitewash at the hands of Labour.
Of course, a looming General Election will, undoubtedly cause some short-term uncertainty in the property market and a change of Government might see this prolonged as we wait to see what policies are introduced and the effect they have on the economy at large.
The private rental sector remains robust but affordability levels are now limiting the seemingly endless upward movement in rental values and landlord concerns about impending future legislation are seeing some exit the market. This, of course, weakens supply and so sees values retained as demand remains strong.
Overall there is an active market for those who wish to buy, sell, let or rent. Accurate pricing and a planned approach are required to maximise the chances of a successful transaction within required timeframes. At Christopher Nevill our experienced teams in sales, lettings and property management are here to assist and advise. Our track record of success under all market conditions means we are well placed to deliver the service and results required.
Happy Easter!
Darren Murphy
