The property market is very complex right now and is being influenced by many external factors, some of which are changing as the month’s progress. The Mortgage Market Review, Help to Buy, the endless speculation about a non-existent price bubble and the recent decision to switch the power to control the size of Mortgages to the Bank of England have all had an effect. The year started very positively for the market with everything in full swing. As the year has progressed the supply of instructions new to the market has increased, partly due to confidence in Bradleys shown by vendors reading our allAgents reviews and partly due to confidence in the market growing. The pent up demand from buyers has waned a little as most of those who had been waiting for the market to improve before buying have now been satisfied. This means in very simple terms that we are on our way into a normal and stable market where if a property is placed on to the market it will have to be correctly priced to obtain any interest from the very internet savvy buyers, who can tell to within a few thousand pounds if a property’s owner is being ambitious with their price or not.
So why buy now? What about the risk of a price bubble? Will mortgage rates go up?
Firstly, buying now is the only thing to do as with ‘Help to Buy’ still available a mortgage can be obtained at a very modest cost and whilst the current rock bottom interest rates will undoubtedly come to an end towards the end of this year or early next year, Mark Carney, the Governor of The Bank of England has committed to only slow and small increases to be sure of not damaging the improving economy. The Mortgage Market Review has come in to force recently and this has seen Lenders be forced to look into the affordability of a mortgage for an individual’s circumstances as well as if they just fit the lending criteria. The effect of MMR is to create a massive back log in mortgage applications if dealing with a lender direct. My advice is to use an Independent Mortgage Broker who is not hampered in the same way as the Lenders themselves. I have heard the recent statistics from lenders are 5 weeks to gain an initial appointment and 17 weeks to issue a mortgage offer! The Bradleys Mortgage Advisors are completely independent so can offer the best rates and get the offer out in 3 â€“ 4 weeks under normal circumstances. There is absolutely no need to be concerned about a price bubble. There is much speculation in the press and from politicians about the housing market and if it is running the risk of overheating. There is certainly a problem in London, where the market is being fuelled in an unsustainable level mostly by foreign buyers looking to invest in the Capital. I am pleased to hear that even London is now starting to slow slightly from what was happening in the first few months of the year. Outside of London there was a small surge in activity early in the year but this is now just performing as a normal market. Speaking as an agent who operates in Devon, Cornwall and Somerset, Bradleys have 33 offices covering from Taunton to Penzance so I am well placed to report on real figures that cover the whole region. The first half of 2014 has seen both sales and exchange prices rise by 6K or 3% compared to the first half of 2013. The average price of a property sale agreed across the region in the first half of this year was 210K. A 3% rise is hardly the stuff bubbles are made of and I only hope that both Mr Carney and Mr Osborne recognise the only problem is contained within the M25.
As I see it Mortgages are still available and so long as you have a 5% deposit and some cash for your fees then the rates are good and you still have time to lock into a fixed rate before any increases, you still have the time to get a mortgage before the Bank of England make that a bit harder if they decide to lower income multipliers. The market is stable and a 3% increase in Value is way better than any investment in the bank. So don’t wait, it won’t get any better than it is today. That is certainly the message I am spreading and I think that is the message the whole industry should be spreading.