Don’t panic! The market is, in all honesty, going through a period of transition and adjustment. But we’re not in a ‘property crash’ as the narrative seems to be pushing.
We’ve received five offers on one property for sale today, with most offers 5%+ above asking price.
Subsequently,we’ve also received a single offer on another property 4.6% less than asking price.
Why shouldn't I panic if property prices are dropping?
So, like all things, there are two sides to every story. Some properties and prices will be unaffected, some prices will have to adjust, and we’re seeing those adjustments at around 5%. Given the 25-30% growth over the past couple of years, with 16% of that growth in the past 12 months alone, that still leaves a majority of homeowners in positive equity.
Land Registry has registered 239 completions in MK45 for 2022 so far, and there are two more full months of the year to go. Land Registry registrations are taking twice as long as normal, but even allowing for the same level of registration for the next two months, and allowing for the number of registrations to double once they allow for delays, the final figure for completion in 2022 would be circa 625-675. Given also delays in conveyancing, that figure being lower than normal isn’t surprising, compared with:
990 completions in 2021.
849 completions in 2020.
949 completions in 2019.
850 completions in 2018.
856 completions in 2017.
939 completions in 2016.
880 completions in 2015.
That means, out of everyone who’s moved since 2015, 90% of properties are still worth more than they were when they bought—and considerably so. It’s the 10% of homeowners who may find themselves momentarily losing equity, but hopefully not in a position of negative equity.
But What About Mortgages? They have all been pulled from the market!?!
Ok, so you still want to move, but you’re being told there are no mortgage products available. It’s true around 45% of mortgage products were removed from the market, however,we’ve seen a lot of these products return, and those that have not returned are primarily ‘cashback’ fixed interest rate deals,where lenders were paying you to borrow money. Interest rates are higher than previously, but there are still good deals out there.
Mortgage rates as of 30th September 2022:
• Nationwide trackers start at 3.19%, whilst fixed are available from 4.89%.
• HSBC are offering trackers at 1.39% + base.
• Barclays fixed terms start at 4.24%, going up to 5.8% for 95% loan to value, and trackers start at 3%.
So, some people have enough equity to move, and if I wanted to buy, I can still get a mortgage, but what about market confidence?
Although Orchards opened our doors 20 years ago, between us, we have almost 100 years’ experience in buying, selling and letting property. In any market, some things remain true; if you need a bigger house for new arrivals, if you need a smaller house because kids have left and its costing a fortune to run an empty house, if you need to live closer to work, schools or transport links, or if you’re keen to get on to the ladder or start your family in your own home, these things don’t change. We’re lucky enough to operate in an incredibly sought-after location, with great schools, industry and transport links, and as such, our confidence remains high.