Sellers Solutions: What does the latest interest rate rise mean for my home move?
There is no getting away from the fact that the last time interest rates were this high was 15 years ago. If you already have your property on the market or are considering whether now is the right time to move, what does this mean for you?
No one likes uncertainty, least of all home movers. We see it every day, the craving home movers have to control a situation that has so many interdependent variables, the understandable desire to have a moving date secured as quickly as possible, sellers searching in earnest for reassurance that their new perfect home is out there before taking the plunge and putting their property on the market. Home moving is littered with uncertainty and the consistent rise in interest rates just adds another component to an already complex mix.
With the Bank of England consistently increasing interest rates since December 2021, households’ disposable income has been eroded. This is leading to decisions to move being delayed and increasing pressure from competing monthly outgoings giving rise to concerns over future affordability. All of this has led to buyer-demand over the last 2 months decreasing by 18% *
As we see inflation begin to fall, we all remain hopeful that the rise in mortgage rates is close to peaking, however, indications are, UK house prices are still on track to be 5% lower over 2023, with properties with prices over £300,000 most expected to fall*. Homes within this price range usually means larger mortgages and bigger deposits required. The increased cost of mortgages means more households are being priced out of the market, and this weaker buyer demand inevitably pushes house prices lower.
It isn’t all doom and gloom though, even with the expected 5% fall in house prices in 2023, this would mean that prices are still 15% higher than at the start of the pandemic,* and as affordability comes more into focus, buyers shift to looking for smaller, and more energy-efficient homes.
So as the housing market begins to realign with this new normal of higher interest rates, what can you do to make your home move happen?
Working closely with the right estate agent and financial advisor is key. This way everyone involved can understand the steps that are important to secure a successful home sale. Finding an estate agent that values working together to balance your needs and the many changes in market conditions will make your move a less stressful experience.
If you’ve found this article interesting and would like to chat about more current market conditions and what this means for your own home move, please get in touch with us.
Until next time
*Source- July 2023 Zoopla UK House Price Index