Welcome to the latest edition of Source

I don’t think the housing market has ever been more difficult to interpret. There is a huge amount of noise about transactional volume and lending rates – which creates debate and confusion about what the future holds for those who plan to buy and sell this year.

Alasdair Dunne Head of Residential Sector

alasdair.dunne@fishergerman.co.uk

Let’s start with the relationship between inflation, interest rates and house prices. In its simplest form, inflationary pressure necessitates interest rate rises which makes borrowing more expensive. So house prices, in effect, need to fall if people are to be able to buy in accordance with their pre-inflation plans. This is exactly what has happened over the last few months. We don’t need to look too far back to trace the catalyst of the current price pressures. The mini-budget set interest rates rocketing and confidence falling, but its dramatic effects are now working their way out of the system. In reality, we can probably see our current market conditions as a natural landing point after the extraordinary “race for space” pandemic-driven market. We’ve just reached this point after travelling a particularly rocky road, rather than a steadier transition.

With longer term lending rates beginning to settle, and a general expectation that we will avoid a recession, should we question why the Office for Budget Responsibility has published a particularly bearish forecast suggesting house prices will fall by 10% by 2024? Other notable institutions have been more reserved than the OBR; Halifax suggest falls of 8% and Nationwide suggests 5%. Remember what I said about a difficult market to interpret… who has got it right?

Going back to that relationship between house prices, interest rates, and inflation: prices can effectively fall if they stay at the same level in a period where interest rates are rising. It’s worth remembering that even a 10% fall in house prices takes us back to levels we saw in early summer 2021. On that basis, if you aren’t a recent mover, then the landscape, as far as price is concerned, hasn’t really changed for you. A market correction following a rapid spike isn’t unusual. It is also worth noting that house buyers and sellers hate treading water, and many have found the need to be spectators over the autumn and winter and are ready to get moving.

Plenty of reasons then, to anticipate a generally positive marketplace – and it’s worth noting that mortgage approvals hit their highest level in 3 months in February this year. Our experience has demonstrated that, whilst there are fewer people registering as buyers, those who are, are extremely active resulting in our viewings numbers tracking at a higher level than 12 months ago. The number of properties being offered for sale is improving in the village and country homes market that we operate in, demonstrating a good deal of positivity.

So, onwards! If you are looking for your perfect home or if it’s time to sell, we are ready, willing and able to help. We are lucky enough to specialise in the sale of the type of houses that are in demand, in areas that people are very keen to move to. There is a select collection of lovely properties for you to browse through in this magazine, but please visit our website for more, and do lift the phone to us; at any one time we have many houses being prepared for sale and we are always happy to give you an early preview if we can.

Our team, and their contact details are on page 4. We would be very pleased to hear from you and to offer you any advice or help that we can. Let’s find the one.