It’s a good moment to look back at the property market which, after the winter hibernation, set out its stall for the year.
Given that three months have now passed, we can also make a well-informed estimate about what will happen over the remaining months.
So where are we, and importantly, where are we going? Well, the market, like much else, has been affected by the unusually cold and dreary weather.
After a positive beginning to the year, the spring bounce faltered as buyers didn’t get the moving bug normally brought on by early sunshine.
The property market could continue to change this year
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Whilst the Bank of England (BoE) hasn’t increased rates since July last year, the failure to reduce them – whether rightly or wrongly – has kept many potential buyers on the fence.
Mortgage lenders have unilaterally reduced the cost of borrowing – mortgage product rates in January were at their lowest level for seven months.
That saw a negligible but important 0.7 per cent increase in prices that month.
Jump forward to February, and signs of life were continuing. The number of mortgages approved rose, and, anecdotally at least, estate agent contacts of mine were reporting a resurfacing of investor and developer buyers who had been AWOL for 18 months.
By March, optimism was in shorter supply – many in the business had expected a rate cut by now. Banks began to pull their most attractive interest rates and load application fees to deter all but the most committed from borrowing.
Prices edged up again despite this – perhaps as that elusive spring weather finally arrived with the clock change.
Halfway through April, it is a case of ‘more of the same’- a slowly improving picture, yet the market is on a knife edge.
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Jonathan Rolande shares his expertise
JONATHAN ROLANDE
BoE is still reluctant to reduce interest rates, and political upheaval in the UK and the turmoil overseas is unsettling the market—many are still adopting a wait-and-see approach. Without a positive step from the bank or Government, the market, left to its own devices, will do no more than limp along for the remainder of the year.
Many hope for this believing that a massive correction in prices would be good for us, it would allow hard-pressed first-timers to finally afford their first home.
They are wrong. A falling market will not encourage developers to build more homes, making the shortage even more acute.
Unless they step in to help there is only one thing we can do to help the staggering property market – pray for some sun.
Find out more about Jonathan Rolande at www.housebuyfast.co.uk.
