The housing market in the UK is showing its autumn colours, and in this October property market update, we’re here to provide you with an insightful overview of the trends, challenges, and exciting prospects that lie ahead.
The current landscape
In the residential sales sector, there has been a slight reduction in the number of available properties in September 2023. This reflects ongoing market uncertainty, but we expect this trend to level out in the short term. The majority of properties are continuing to sell below asking price, as the market continues to level out; but this needn’t be a concern as property prices are all relevant. So, if your property is now worth £10,000 less, there will be a knock-on effect to the property you’re looking to purchase.
The UK economy and housing market are still facing uncertainty. The interest rate being held by the Bank of England in September was promising news. Despite inflation remaining high, there is a silver lining as it’s moving in the right direction for businesses and households.
You might have heard the term ‘Mortgage Charter’ floating around in the last couple of weeks. This is because the UK’s Financial Conduct Authority and mortgage lenders agreed a specific set of measures with the Chancellor in a bid to assist homeowners worried about increasing interest rates.
Approximately 800,000 mortgage holders will be transitioning away from their fixed-rate agreements between now and next summer. If you happen to be one of these 800,000 and you’re grappling with concerns about your mortgage payments, take a breather – you can connect with your lender for assistance without any repercussions on your credit score. Borrowers can secure a new deal up to six months before their fixed-rate deal ends. They can switch to a better deal before the new term starts and switch back if needed within six months of starting the new schedule.
On 23rd October 2023, it was announced that the Treasury is looking to extend the mortgage guarantee for another year to help those struggling to cope with increasing mortgage rates. This scheme was introduced in March 2021 by Rishi Sunak and was designed to help people looking to secure a mortgage with a 5% deposit. However, this is coming under increased criticism as the cost of living crisis and increased mortgage rates continues to hit households hard and reduces the number of people able to meet even this criteria.
The chancellor will announce further information in the Autumn Statement on 22 November.
Keep your trusted estate agents and mortgage advisors close to support you on your journey and help secure you the best deal moving forwards.
As of Thursday 26th October 2023, the current average mortgage rates are shown below:
Rental market review
After an unprecedented three and a half years, where the rental market has been frantic and rents sky high, we appear to be in a calmer period where rents are stabilising. Whilst there is still strong demand for the “bread and butter” market – 2 bedroom houses and flats and 3 bedroom family homes – the top end of the market, i.e. over £2,000 a month, has stalled somewhat, as would be tenants selling larger homes are not able to sell so readily. We are also seeing fewer London tenants relocating, again due to a slower sales market in the city.
What this all means is that whilst there is no fundamental change to the rental market – the underlying demand is still there for most sectors – it is much more important to price a property realistically, to ensure that a suitable tenant is found within a reasonable timescale.
We anticipate rent levels to remain stable for the next few months, whilst the economy realigns, but landlords with good properties can still look forward to achieving good rents.
As ever, choosing an experienced lettings firm to deal with your property is of paramount importance. The lettings team at Sims Williams are always happy to answer any questions you may have.
October also brought a news update for the rental market. On 2nd October 2023 a new ‘how to rent‘ guide was published, by the UK Government, for tenants and landlords in the private rented sector to help them understand their rights and responsibilities. It provides a checklist and more detailed information on each stage of the process. For all new tenancies or replacement tenancies (even if they roll over into statutory periodic tenancies), it’s crucial to provide the ‘how to rent’ guide. Failing to do so could render any Section 21 notice invalid.
The road ahead
The UK property market is currently facing a mix of challenges and opportunities. The honest truth is that there is no guarantee or linear roadmap for the months ahead. Although there has been a slight decrease in available properties due to ongoing uncertainty, we anticipate a short-term stabilisation while house prices continue to rise, often selling below asking prices.
Despite economic ambiguity, maintaining interest rates provides some relief for prospective homeowners. The “Mortgage Charter” and an extension of the mortgage guarantee scheme offer solace to those facing rate increases.
Governments across the UK continue to tinker with legislation and legislative programs, disincentivizing landlords along the way. Supply remains tight with far more applicant registrations than properties available. Pressure on rents continues although there are some signs of restraint in this month’s figures compared to last month.
Market analysts predict that the Bank of England’s upcoming November meeting will result in a rate hold, but all eyes are on the inflation figures to see if the trend continues in a positive direction. Despite the current economic climate, buyers are actively searching for properties. However, serious sellers need to ensure that they are pricing their properties strategically to attract motivated buyers.
Sims Williams are estate and letting agents with offices in Arundel, Bognor Regis, Chichester and The Six Villages. For expert advice on all things property or for a free no obligation market appraisal, do contact your local Sims Williams office. We are here to guide you through every step of your journey, providing professional advice, support and guidance you can trust.