A strong labour market, growing consumer confidence and an increasing acceptance of a higher mortgage rate environment will support the housing market, Fine & Country claims.
Despite house price indices reporting that property values are falling and mortgage lenders withdrawing products due to concern that interest rates are set to rise again, Nicky Stevenson, managing director of the upmarket agency predicts the market is more likely to have a soft landing.
She said: “Despite tougher market conditions, the market is showing stable resilience. Homes are selling, although at a slightly lower rate and many at a lower price than seen over previous months.
“Flatlining prices are luring a steady stream of buyers, with agreed sales over the past four weeks having reached their highest point so far this year, up 11% on the five-year average on the same period.”
Stevenson said that confidence in the market is showing shows of growth.
She said: “Inflation is finally slowing, decreasing to 8.7% in April, which may help reassure prospective buyers that they will be able to afford their mortgage repayments.
“Despite mortgage rates being likely to creep up in the coming weeks, the increase in competitive mortgage products will help put more people on the property ladder.”
The agent’s latest market report highlights rising confidence among buyers and a jump in landlords selling up and suggests the sunny weather and May bank holidays have given people the chance to rekindle their property searches.
Stevenson added: “Sellers should be cautious of recent positive data on the housing market and price their homes realistically. Indeed, almost four-fifths of offers are currently being accepted below initial asking price.
Looking at the prime market, Stevenson said it continues to show resilience, with the average price of a property in the prime market at £1.3m, down 0.1% on last month but up 7.9% year-on-year.
She added: “More than 31,000 sales priced £1m or above took place across England and Wales in the year to March 2023, up almost one third on pre-pandemic levels.
“With temperatures finally heating up, gardens remain popular. According to ONS, 88% of homes in the UK have access to a garden or outside space. A well-maintained garden can add a premium of between 5% and 20% to a home, with a south-facing garden adding 7%.”
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If Ms Stevenson thinks that inflation is tamed I suggest she's sorely mistaken. I have no crystal ball but my guess is that we're going to see it rise again.
Wishful thinking - how long is the 'strong labour market' going to last with the BoE prepared to cause a recession in order to control inflation.
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