The property market continues to flourish as would-be buyers rush to settle purchases before mortgage interest rates rise further. And chains continue to fall apart as gazumping flourishes and desperation rises.
And it’s not just the buyers who are desperate – conveyances too are turning away work, unable to cope with the demand, according to one recent property analyst.
Country and Seaside slowdowns
Last year’s hot spots such as countryside villages and seaside retreats are still popular but, as one Cornwall estate agent put it: “the froth is coming off the market.”
Truro estate agent Duncan Ley said: “It’s a lot less frantic than it was — where you’d get ten competing bids on a property last year, there’s now maybe two or three, and surveyors are being a lot more conservative about values.”
Neighbouring Cornwall estate agents report similar, saying poor or overpriced properties are being left – unlike last year when ‘pretty much anything went.
And it’s a similar story in Norfolk where demand is definitely falling, according to one estate agent in Burnham Market – to the extent it’s “pretty much a trickle.”
Property reductions appearing in South East
Those looking for price reductions though, would be better heading north where property purchasers HBB Solutions say the biggest property price discounts are in the North West, West Midlands, Yorkshire and Wales. But further south there’s the appearance of shifting prices too. In the South East, for instance, one in four properties have reduced their asking price.
‘Secret sales’ on the up
Property analystists TwentyCi expect 18,600 more properties than last year to be sold privately ie without being publicly advertised. And it’s not just million pound properties either – a lot of estate agents already have lists of ready buyers fed up with being previously gazumped and willing to go above the asking price.
Rightmove’s latest figure show the average home asking price dropped by £4,795 for the first time this year. It brings the asking price of the typical property in England and Wales to £365,173. That was a drop of 1.3 per cent between July and August.
Executives at the property portal attributed to fall to the summer holiday period, insisting the market would finish with seven per cent year-on-year growth by December this year. But other property onlookers believe it’s more than that. They insist the speedy rise in the cost of living is beginning to take effect.
New mortgages costing more than old
The Bank of England’s base interest rate rise this month was the largest increase in 27 years. For the first time in almost a decade the typical interest rate for new mortgages is higher than for existing mortgages.
Lending rates have risen from one per cent to four per cent within the past year – substantially increasing monthly mortgage costs for many borrowers.
When rates have risen this dramatically in the past it has been during a period when the property market was extremely slow.
However, responsible lending this time round (compared to the 2007 recession) means many homeowners haven’t over-stretched their budgets, insist analysts. That means we’re not expecting too many repossessions.
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