The UK Property Market's Tough Spirit Against Rising Costs
The UK property market is showing its tough side, managing to stand strong despite borrowing costs going up. This article dives into some key signs that reveal how the market is doing and explains what's going on behind the scenes.
Signs of Strength and Market Toughness
Even though things have been a bit crazy of late, the UK property market seems to be holding its ground. Some important clues, like how quickly homes are getting sold and the number of available properties, are actually better than they were before the pandemic hit, way back in 2018 and 2019. This consistency tells us that the market is doing pretty well despite the challenges we are currently facing.
Steady Prices and Holding Steady
Prices of homes are something everyone watches closely. Yes, there has been a bit of a drop, more of that further down in this blog, but overall, home prices are staying pretty steady. What's interesting is that there hasn't been a big increase in the number of homes being sold for less money. It's important to note that the average national price, once we adjust for a few things, has gone down since it reached its peak in August 2022, however that peak was during the super crazy time when everyone wanted to buy a house, and there weren't enough homes to go around.
Dealing with Mortgage Rates and Feelings
When mortgage rates go up, it can make people feel unsure about the property market and remove confidence. What's good to know is that what's happening right now is pretty normal when we look at the whole year & even previous year dated pre-2020. The big question is: Will there be more homes that haven't been sold later in the year, showing that there's more supply than demand? Judging by what is being experienced right now, that doesn't seem likely, but only time will tell.
Rising Interest Rates and the Property Market
Recently, the Bank of England base rate went up a further 0.25% to 5.25%. Critics argue this was a bit much, especially since the people who manage the economy said inflation would probably go down by itself. They're asking why take the risk of causing a recession and making things hard for people? We don't really know how the recent interest rate increase will affect things yet.
Keeping It Together in Uncertain Times
Despite the decision to raise interest rates, property owners in the UK are staying calm – and they're right to do so. There's no mad rush of people selling their homes, and sellers aren't slashing their prices more than usual. After the record low number of homes for sale, things are getting back to normal, signalling a return to a balanced market after the crazy times of 2020,2021 & 2022. And for now, it's taking a reasonable amount of time to sell homes.
Numbers Tell the Story
According to the latest info from the Office for National Statistics (ONS), home prices in the whole country are £54,862 higher than before the pandemic started. Even though they've gone down a little since September 2022, it's only a 1.62% drop. And when we compare prices to the start of the pandemic, they're still up by an impressive 23.58%.
Lets Look More Local
Zooming in on the Bexley & Dartford boroughs:
- In Bexley, home prices have gone up by £56,915 since before the pandemic, but they've gone down by £14,652 from the peak in October 2022. So, prices are still 16.78% higher than before COVID, but they've dropped by 3.57% from their highest point.
- In Dartford, home prices have gone up by £58,720 since the start of COVID, but they've gone down by £8,271 from their peak in November 2022. Currently, prices are 19.78% higher than before COVID, but they've dropped by 2.27% from their highest point in November 2022.
In Conclusion
In the ever-changing world of the UK property market, one thing is clear: It's not giving up easily.
Despite the challenges, the market's strong base provides comfort for everyone involved – from buyers to sellers. As we navigate through the twists and turns of prices, borrowing costs, and local differences, remember that the UK property market has proven it can handle tough times and come out even stronger, which was shown in the recessions in the 80's & 90's, the financial crisis between 2007-2009 & even through Brexit, so one can only hope that we continue to see that resilience 🏡 💼
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The Property Cloud Team