Many property professionals may be getting excited by lower inflation and falling mortgage rates but an auctioneer is warning that there could be more pain to come.
Stuart Collar-Brown, co-founder of online auctioneer My Auction, has warned that the market hasn’t yet bottomed out.
He said: “The biggest hurt is yet to come as homeowners on a two-year fixed rate mortgage come to the end of their current deal.
“With borrowing rates now at least 3% higher than their existing rate, these individuals will really feel the pinch. Rising borrowing rates are a hard pill to swallow and for many, it means that what they could afford at the beginning of the year is no longer in reach.
“The best we can do now is hope for the best and prepare for the worst as sadly we believe we may see another interest rate rise early in the new year.”
He said he is seeing a very different type of buyer and seller come into the auction office with the housing market as it is.
Traditionally, the auction market was largely inhabited by investors but Collar-Brown says he is now seeing families who need to make quick sales as they can no longer afford their mortgages and also families who have sold privately and now need to find a cheaper alternative. He says the market is now more diverse than ever before, adding: "The popularity of buying and selling at auction has been steadily rising this year as more start to see the value and advantages of doing so. People who do want to sell in the current market want to do so quickly.
“One of the advantages of selling your property by auction is the certainty of sale. Contracts are exchanged when the gavel falls which creates a faster turnaround time (four weeks), and transparency. This is particularly useful for those who need to complete before their existing mortgage offers expire and they must reapply with higher borrowing rates.”