National trends and misleading press releases are clouding the view of how the housing market is reacting to the increase in interest rates and mortgage rates. As expected the rise in the cost of borrowing brought about by increasing interest rates is having an effect on how people approach the property market. However, things are not as bad as they may seem.
Granted a property may take slightly longer to sell as buyers assess their options and affordability, but a report by Hamptons highlighted that only 52% of properties sold in June were agreed under their asking price - the same level as the previous month. Coupled with this, the average agreed sale was a mere 4.4% below the asking price, again the same as it has been in previous months. This proves that the market is maintaining stability as the year progresses.
Furthermore, national press releases have highlighted a drop in average house prices year on year across the previous month. What they fail to mention though are the market conditions at each of these times. Twelve months ago, and before, the market was overinflated and chaotic. Properties were selling at levels well above asking prices as we experienced the final throes of the price boom.
A year on and we find ourselves in a normal market where properties are selling for values at the advertised price or just below. The market has settled and therefore the over-paying has receded. Obviously, this means that the average price agreed for a house is now not only more realistic but lower than it was a year ago.
By trying to keep this in mind we are looking to guide our clients through a market that is now balanced with regard to buyer and seller power. For sellers their property still retains good value whilst for buyer they continue to look to achieve the most beneficial agreed sale in respect to increased borrowing and living costs. The market is littered with properties that were trying to catch the end of the wave and are now reducing their prices to come back in line with healthy market values. As in all markets in order to sell a property has to be carefully priced and well promoted.
Our local property experts would be delighted to speak to you about your property should you be thinking of venturing into the property market.