Housing Market Pricing
Whether selling or letting a home, there are as usual various factors involved that combine
to create poor visibility in trying to make decisions for the future.
The current market movement in terms of pricing is certainly a key factor fuelling
media speculation and focusing the minds of many a homeowner across the nation.
An Overview of Pricing and Current Factors
Market pricing adjustment linked to
artificial accelerated gains
House prices rose 7.8 per cent in the year to June, a
slowdown from the 12.8 per cent annual rate for May from data released
by the Office of National Statistics (ONS) August 2022. The average house price cost £286,000 in June, £20,000 more than a year ago.
We need to remember that house prices have only accelerated
at an unusual rate for the last two years, as the pandemic and the Government’s
stamp duty holiday triggered a flurry of moves and ran down the supply of
larger homes that could better cater for home working. This is well documented
by the Financial Times.
There is no doubt that house prices are at an all-time high and for those wishing to downsize their values may allow that sector of the market greater flexibility. Demand for housing with home office capability and open space / gardens remains at the forefront of purchasers’ wish lists. Sellers would do well to highlight these features to best advantage. Speculation of mortgages increasing to 4 or 5 per cent will adversely affect some parts of the market but wage increases, and 20 per cent plus deposits, and an outlook of say house price increases of 0 to +3 per cent in certain parts of the country are equally positive for other parts of the market.
Resilient banks and lending surplus
Whilst the Bank of England (BoE) warns risk of inflation rising
to around 13 per cent before the end of the year end, and forecasts a recession
to rival the downturn of the early 1990, this is a worst case scenario and at
present seems most unlikely. Measures were taken to protect capital adequacy
ratios of banks by central banks.
During the Global Financial Crisis, when average UK house
prices fell 19 per cent in the 18 months from September, nearly 20 per cent of
people were on loan-to-value ratios above 90 per cent. Today that figure has
halved to around 10 per cent and the riskiest lending of at 95 per cent
loan-to-value ratios has ceased (Zoopla).
Rental Yield Calculator and useful info.
“Our internal barometer for the West Suffolk sales market is set to ‘fair to middling’ over the course of the next six to twelve months. In the global financial crisis (GFC), Bury St. Edmunds and the surrounding area remained resilient and its deep pockets of wealth weathered that storm and kept house prices and the local spending economy relatively immune unlike the rest of the country. As always, a beautifully designed home, if priced right, generates broad market appeal and in some instances achieves above market price. We have seen such properties sell on the one and only first viewing. Examples are in both our video streams, Shrubland House in Horringer and Grange Farm Barn in Hengrave, Bury St. Edmunds.
Meanwhile, the local lettings market remains extremely robust due to a recognisable influx or rotation of United States Air Force (USAF) personnel at neighbouring RAF Mildenhall and Lakenheath, likely induced by the escalating Russia-Ukraine conflict. These individuals are well-insulated from the woes of a host economy given their inflation-adjusted housing allowances and other exceptional military housing provisions”.
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