According to the latest data from Rightmove, Average UK house prices fell in August 2022, their first drop this year, according to the latest market data from Rightmove. But what does this mean for the local property market? There are some compelling influences that will inevitably have an impact on the property market, which we are seeing already. 2 months ago, there were a significant number of properties listed as Offers In Excess Of. A direct reflection of a lack of available stock paired with the demand for property in and around Hastings. This has now changed, with properties being listed at the asking price.
So what are some of the factors cooling the mood of buyers nationally?
Interest Rates & Mortgages
According to the latest Bank of England update, the bank rate is 1.75%. The 0.5 increase is the sixth rise since December 2021, when the bank rate stood at just 0.1%. Now at its highest level for 14 years.
According to the Financial Times, borrowers on fixed-rate mortgages are protected from immediate changes in interest rates. However, around 40 per cent of these are set to expire this year or next, exposing borrowers to higher rates. Variable rate mortgage holders are the ones that need to watch out. According to Moneyfacts, a 0.5 percentage point rise in the current average standard variable rate of 5.17 per cent would add £1,400 to a total home loan bill over two years, based on a £200,000 repayment mortgage, or £58 per month extra.
Domestic Energy Bills
According to the latest House of Commons energy briefing released this month, it is forecasted that a typical household is now predicted to pay the equivalent of £4,266 a year for the three months to March 2023.
Consumer confidence has plummeted to its lowest level since records began in 1974. Optimism is weaker than during the global financial crisis, Brexit or Covid-19 (GfK). The Covid recovery, war in Ukraine and rising energy and food prices, alongside a strong labour market and low unemployment, have created a perfect storm. Inflation is pushing a 40-year high.
House prices nationally are likely to come under more pressure as rising interest rates and increased living costs take a firmer hold. There is still strong demand for seaside and country properties, in particular in and around Hastings where house prices have been relatively low compared to other parts of the country. With working from home, or at least for part or most of the week set to remain standard, buyers are still looking for that larger home and additional room as an office space. We expect property prices to plateau across the rest of the year as households are further pressed economically, making choosing the right estate agent to help you sell your property more important than ever. Not just based on cost, but what they can do to add value to the sale of your property, from service levels to marketing and sales progression, to ensure your property stands out from the crowd.
The next inflation rate announcement is due on Wednesday 14 September, with the next Bank rate decision scheduled for 15 September.