Our Sales Director, Chris Thew myth busts the property market headlines
We almost naturally believe everything we read in the press, which may in turn lead you to believe that housing prices are about to crash and that the market might come to a standstill. However, this is not the case, so we’re shedding light on the property market right now.
Here at Mishon Mackay, we look to dispel some of the negative headlines and explain what the press is really saying, and help you make the right decision for your next move.
The headlines
Key: SDLT = Stamp Duty Land Tax
Telegraph: ‘House prices to fall after Jeremy Hunt scraps SDLT’
Mirror: ‘House Prices to fall by 9% as mortgage rates rise and SDLT cut experts warn’
What it means
What the headlines do not tell you here, is that SDLT cuts announced within the mini budget are remaining in place until March 2025 – over two years away.
This is great news for anyone wanting to buy a property right now because back in September, the government doubled the threshold at which stamp duty tax gets paid. This means that buyers now save tax by paying nothing on the first £250,000 of the purchase price.
If you’re a first-time buyer, it’s even better news as the threshold was increased to £425,000 on properties costing up to £625,000, meaning there’s no tax payable on an additional £125,000.
Additionally, the house price index, a national statistic that shows changes in the value of residential properties, states that:
“As of September 2022, property prices have risen by 9.5% compared to the previous year.”
So, if house prices drop by 9%, prices are still up 0.5% year on year. The drop really represents more of a correction in the market, not a crash.
The industry backing
JLL, a leading professional services firm in real estate, predicts: “home values are still expected to rise cumulatively over the next 5 years by 8.9%, but 2023 will likely deliver a fall of 6%”. That’s notably different from some of the forecasts we see on the news.
Busting the myth
So, will rising mortgage rates contribute to house prices falling?
The truth is we have all become accustomed to low-interest rates. The last time we saw interest rates above 1% was in January 2009, so with the Bank of England swiftly moving the base rate to 3% and mortgage rates increasing, coupled with the cost-of-living crisis, it can feel like now is not a good time to move.
The mini-budget did create confusion in the mortgage markets with many lenders withdrawing their deals and increasing their rates. However, the government U-turn on this budget returned confidence in the financial markets and we are now seeing mortgage rates stabilising and some are coming down.
There is still an appetite for lenders to lend, unlike the credit crunch of 2008, which did negatively affect house prices, but mortgage lenders will still be offering deals. An independent advisor with access to the whole of the mortgage market is best placed to give you the best advice.
What we can do for you
At Mishon Mackay, we understand that negativity within the press and the current state of the economy can fill you with despair and pause your plans, but when will ever be the best time to move?
Perhaps you have outgrown your existing home, need to free up some finances and downsize, or are moving a family relative for health reasons? If any of these are the case, then your motivations for moving will always still be the same.
We have 35 years of experience under our belt in navigating our customers through the moving process, so we are on hand to offer you the best advice as to whether now is the right time to move, for you.
We are still seeing a steady flow of instructions coming to the market at Mishon Mackay which shows how resilient the market is. With the Christmas holidays on the horizon, now really is the best time to get your home on the market.
With the majority of us having more downtime over the holidays to spend looking at the property portals, at Mishon Mackay we always experience a high level of enquiries in early January, so getting in front of a motivated audience is key to success in selling your home over the next few months.
Get in touch!
If you need to move or just want some friendly advice on what the market is doing in your area, then reach out to one of our experienced team who will be happy to give you the best advice. You do not need to delay your decision; we can help you move now.
Pop in for a cuppa or call one of our team at your nearest branch:
Brighton – 01273 775588
Hove – 01273 821800
Kemp Town – 01273 670067
Preston Park – 01273 789400
Portslade & West Hove – 01273 418888
Hurstpierpoint – 01273 834602
Rottingdean – 01273 944800
