“Vendors want last year’s prices but buyers want next year’s prices.” This quote from a recent conversation with Knight Frank perfectly sums up the current housing market situation.
Despite alarmist headlines signalling a significant fall in house prices this has not materialised as predicted. Indeed, the latest official data from the Land Registry shows four month-on-month increases, with the average UK house price standing at £291,000 in August. The all-time high recorded in November 2022, was £293,000 so the fall is only negligible.
The Land Registry also recorded that the average price of a property in the UK rose by 0.2% between August 2022 and 2023. However, whilst growth is still on the cards it is not nearly in the same ball park as the previous 12 months, when house price growth soared by 14%.
So why has the market slowed down from the highs of the previous few years?
The slowdown can be attributed to a number of elements:
- Rising mortgage rates as a result of interest rate hikes
- The cost-of-living crisis continuing to impact homeowners nationwide
- Nervousness to commit to a purchase given the current housing market predictions
Chiltern Relocation has been in the business for 19 years and has witnessed many housing price cycles. We have strong links with local estate agents across Bucks, Berks, Herts and Oxfordshire and speak to our contacts regularly to understand what they are seeing from buyers and vendors on a day-to-day basis. Chiltern Relocation works for a wide range of clients from private individuals, to families, to corporate clients so we have an excellent ‘feel’ for the market from our wider professional contacts.
What Chiltern Relocation is seeing in the market
As the quote succinctly puts it – vendors want to go back to last year’s high prices yet buyers want to wait it out to see if the headlines are correct and a housing market ‘correction’ will materialise. However, despite the lack of traction in the market we are seeing some interesting trends. Some that are encouraging and others explain why the market has slowed down.
On the upside:
Moves are still happening
Job fluidity is now very much back on the table following covid. We are seeing more clients moving for work as corporates wish to return to pre pandemic levels relocating employees. This is creating demand for both house purchases and rentals.
Mortgages are now easier to come by
With interest rates starting to stabilise, lower fixed rate deals are starting to reappear. Also, the great backlog of mortgage rate approvals has now eased making the process much smoother.
On the downside
Rental tenants and home owners are waiting for house prices to drop
We are seeing fewer houses coming to the market as many are choosing to stay in rented accommodation or delay their plans to upsize in the hope that the predicted house price fall will happen. This is creating a real shortage of housing stock which is stagnating the housing market even more.
Renters Reform Bill and HMO license rules
The government has stipulated many changes to the rental regulations which are currently under review in the Renters Reform Bill. This will make it harder for landlords to evict tenants – which protects tenants – but is also a concern for landlords as their wish to protect their property. The government has also has clamped down on HMO – House of Multiple Occupancy – licenses.
These require houses with three or more tenants to make substantial changes to the property to comply with new laws. This includes new fire doors and energy efficiency ratings etc. The cost of an HMO licence is hefty and the required changes in order to comply can also be eye-watering. This means that more and more landlords are selling up which is causing a dramatic drop in available stock for renters.
Should you be thinking about moving now or should you wait?
Our clients have taken the view that they wish to proceed in the current market and their move is for long term gain. Whilst stock levels are low, Chiltern Relocation is finding that there are still opportunities to find the right property. We are also seeing a renewed interest in clients keen to take on a project.
In previous years, private clients would have been squeezed out by corporate developers, but with interest rates making the profit margin much tighter for the big builders it is leaving an opening for private individuals to take on the potential of building their dream home. Exciting times indeed.
If you would like more information about the housing market and advice as to whether now is a good time to consider your move then please do get in touch. Call 01494 672086, email enquiries@chilternrelocation.com or visit our site for more information www.chilternrelocation.com
