If I had a pound for every time I'd been asked about the direction of property prices recently, my piggy bank would probably be full. Clearly, people are anxious and are looking for answers to help make decisions and plans. So here's the latest insight into what is happening.
Even though I never offer predictions, it's a fool's game. I can offer some insight, advice, and observations that may help people make more informed judgements. It's important to remember the future cannot be foretold. It simply hasn't happened yet. Therefore, be cautious of the words of so-called experts in the media who claim to know with confidence what will happen next, especially here in Doncaster.
It is, however, clearly an anxious time for homeowners and homebuyers alike, and the media's reporting on the broader economy has many people worried.
Doncaster, an economy unlike larger cities
The first thing worth noting is that Doncaster's local economy and its property market are very different from other larger cities. We are far less reliant and influenced by happenings in the financial sector like London. Therefore we have tended not to experience the same large swings and fluctuations in property prices, as the chart below shows.
* Source: Land Registry House Price Index.
In recent weeks we have not observed any substantial change in the supply of properties coming onto the market in Doncaster. The lack of supply has been a problem for a long time and is the result of a growing population and a historical lack of housebuilding. Ever since the financial crisis of 2008, far fewer properties have been listed for sale across Doncaster each year, meaning buyers have had less choice. The relatively low supply of properties has been one of the main drivers in moving prices upwards.
Recent events have so far not changed the volume of properties listed for sale and the asking price here in Doncaster. We are keeping a watchful eye to see if this changes.
Mortgage rates have been at ultra-low levels for so long, so it surprised some when they moved. The chart below shows just how low the Bank of England's base interest rate has been compared to the period before the financial crisis.
* Source: Bank of England.
The ability to secure borrowing at an affordable level will influence how much people can pay for housing. The recent hysteria in the media regarding mortgages has caused huge concern. So we sought out advice from Leah and Caroline at Cam Funding Solutions. They are local Mortgage & Protection Advisors and mortgage experts based here in Doncaster. Here is what they said:
What are the Mortgage Advisors saying?
You may have seen a number of headlines over the past week around mortgages and interest rates designed to get a reaction from readers.
Despite the headlines about rate rises and lender withdrawals, there are a significant number of mortgage products available for customers.
There have been some withdrawals of mortgage products as a result of lenders repricing their products in line with the changing interest rate. We expect to see many new products return to the market over the coming days, albeit the pricing may look slightly different.
This is something that happens continuously in the mortgage market, and means we're well placed to support you with all your financial advice requirements during these ever-changing circumstances.
Martin Lewis* shared some useful advice about what mortgage customers should do next:
"If you're serious, speak to a broker - they're currently more important than ever. Lenders' acceptance criteria differ from one to the next, plus they're subject to change - something that's been done at short notice in reaction to the cost of living crisis. For example, one lender might include overtime or commission in your income assessment, and another might only count your base salary.
To navigate the maze, we strongly suggest you use a mortgage broker. They do the 'finding a deal' work for you and have details of most lenders' acceptance criteria, which aren't easily obtainable by the public, plus many deals (even some product transfers) that can only be accessed via brokers."
As always, we are available should you need any support or advice on your finances and insurance.
At the time of writing this article, the interest levels and enquiries we are witnessing from house hunters are unchanged. Even though some buyers' circumstances will have altered, the number of enquiries we are receiving on properties and the offers being put forwards are showing no signs of change. So far, we are not seeing any less demand or reduction in the price buyers can or are prepared to pay.
Should I move right now?
The answer to this question very much depends on the individual and their circumstances. Unfortunately, however, there are no risk-free choices here. Many assume that holding off and doing nothing is a safe bet. But that also carries risks of being priced out of the market. Therefore, those looking to move must consider the impacts of property prices or interest rates both rising or falling. Ask yourself how you would be impacted in both scenarios and what that would mean in the long term. Also, how would you be affected if your perfect home in your ideal location were to sell to someone else?
I always remind people seeking my advice regarding buying a home during anxious times why it is you are moving. For many, It is essentially a place for us to live, a warm and cosy sanctuary to bring up a family, or a space to call your own. House prices, mortgage rates and many other things will fluctuate over the years, but your home will be your home long after the current news headlines are old news. Focus on your reasons for moving and identifying your perfect home and less on timing. Most people will only move once or twice in a lifetime, so finding the right home should be your priority, as you will likely be living there for many years to come.
If you want advice on Mortgages, you can reach out to Leah or Caroline at CAM Funding Solutions. They have a wealth of knowledge and are always happy to help.
Feel free to contact your local Property Hive team on 01302 247754 for advice, or you can book your free property valuation appointment online here.