Our Market Update
Pearson Ferrier Director, Julian Ferrier, offers his insight into the current climate of the UK property market… As we approach the final quarter of ...
Pearson Ferrier Director, Mitchell Pearson, shares his insights into the current climate of the UK property market news and why we’re feeling cautiously optimistic for the future…
With Spring in full swing, we wanted to reflect on what the last four months have meant for the UK property market.
Many of you will be pleased to know that despite the predicted storm at the beginning of the year, the demand for properties remains high, and confidence in the market is slowly but surely growing.
Although the cost of living crisis has continued to take its toll on the UK, the property market has been left largely unaffected – at least compared to the original forecasts at the late end of 2022.
Let’s take a closer look…
Interest rates
As you’re likely to have heard, on the 23rd of March, interest rates were raised, yet again, from 4% to 4.25%. Analysts expect this rate to peak during the summer months at 4.5%. However, this is still lower than the initial predictions following the turmoil of last year’s mini-budget.
Mortgage rates
New home buyers can also take comfort in the fact that mortgage rates have dropped to 4.5% after reaching a high of 6% towards the end of 2022. However, even with this decline, mortgage rates are still more than twice what they were a year ago. This, coupled with the current cost of living crisis, has added to the strain for prospective home buyers and those seeking to remortgage.
However, we expect mortgage rates to remain within the 4 – 5% range for the remainder of 2023. Our advice to those who intend to move is to expect the rates to stay the same and plan accordingly.
House prices
Whilst house prices, on average, have decreased by around 5% – many categories of housing retain their high demand and haven’t fallen much at all. Properties that are maintaining their market value are those that cater to the needs of first-time buyers, downsizers, and investors.
Similarly, terraced houses are performing exceptionally well on the market, and we anticipate this trend to persist for the remainder of the year. This is due to the fact that new buyers have 20% less buying power than they did a year ago, and are therefore seeking smaller homes that provide a greater value for their money.
Rebuilding buyer confidence
Finally, as is usually the case, Spring is proving to be the most popular time of year for property buyers to begin the process of relocating.
With the emergence of sunshine and better weather, many buyers are looking forward to spending the Summer months in a new home, and are more eager to attend house viewings and get the ball rolling. It is, therefore, an opportune time to place your property on the market should you be wanting to sell in 2023.
Of all buyers, those looking to purchase mid-range properties (within the £200-£300k price range) appear most sensitive to market changes, concerned with interest rates and appearing slightly more hesitant.
Despite these challenges, at Pearson Ferrier, we remain cautiously optimistic about the remainder of the year and are actively seeking new listings to present to our database of potential buyers and investors.
