Powerful opposing forces seem to be keeping the property market in check this October, driven by the usual suspects. Demand remains high, but supply is still short. Interest rates are historically low, based on a bank rate of just 0.25%, so mortgages remain cheap, but are difficult to get, with 12% of self-employed applicants being turned down. House prices in the three months to September were 5.8% higher than the same time last year, but down 0.1% down on the previous three months.
The London market, which tends to lead the way for the rest of the country is similarly confused, with first time buyers now almost completely priced out as only 2% of sales in the capital are currently below £150,000. Yet the prime central London market has all but collapsed with just five transactions over £10 million, against 35 transactions this time last year. This is despite the falling pound offering exceptional value for wealthy foreign investors.
This same weaker pound has had its effect on inflation, with the latest figures showing a leap to 1% and expected to rise further, based on higher fuel and import costs. Fortunately, wage inflation is currently around 2% but nevertheless, higher costs of living could possibly hit confidence levels going
forward, especially when combined with a host of Brexit-related fears.
It’s tempting to over-analyse these things. Despite the above often-conflicting factors, the market remains steady and property, as ever, a reliable investment. The key thing is to ensure that your personal/family/career needs are met in your home. If you need or want to move, just do it! If everyone took this stance, then the supply issue would be addressed, buyers would have more choice and property might become a bit more affordable.
Nevertheless, despite the need for more affordable properties, our job remains very much in favour of helping our sellers secure the highest price the market will tolerate, and in that we excel. So if you’re thinking of moving, why not invite us to comment on your own potential sale – you might be pleasantly surprised!
Neil Newstead, FARLA MNAEA
CEO – Oakfield Estate Agents