Since our last Market Comment in September, there have been some big changes in regard to the market, yet we’re seeing only small changes in response here at Orchards.
Sales
The last couple of months have seen us list a wide range of properties, including brand new homes and a stunning 16th Century period property, with a total of 211 new properties on the market in our local areas. In comparison to September and October 2021, when there were 158 new listings, this is an increase of 33% for new instructions—highlighting the market hasn’t halted quite like the media may lead you to believe.
On average, the timeframe between launching to the market and accepting an offer for a property marketed with Orchards is 29 days. A slower turnaround than this time last year, increasing by around 25%, potentially due to coming into a winter with a cost of living crisis. This timeframe is still quicker than other local agents, whose average time on the market is 128, 141 and 155 days.
With 15 completions in September and October, prices achieved were between £258,000 and £1,524,000, with an average sales price of £595,000, and an average period of 18 weeks between agreeing a sale and completing. For the same period of 2021, the average sales price was £472,000. This increase in average prices tells us property is still a fantastic investment, but we’re also continuing to value and price homes in line with the market to ensure sellers get the most for their properties.
During September and October, we’ve noticed a continued desire to move, especially for families looking to settle in the local area due to the outstanding schools. Whilst remote working means less need to be in the office every day, the positioning amongst the mainline train station, A1, M1, A6 and other major roads makes for a very popular destination. However, buyers’ budgets are getting more constrained. More than ever, buyers are interested in reviewing an EPC and understanding the running costs of a home, but also with the cost of mortgage repayments increasing, buyers are reducing their overall budget and are willing to compromise on the ideals they had for their perfect home.
As for mortgages, although the Bank of England has raised the base rate, fixed term mortgages have actually reduced their interest rates for the first time since the mini budget. However, tracker mortgages are still looking like the most buyer-friendly option, with 0.5% + base and 0.75% + base deals being available, meaning even if the base rate reaches the predicted 4.75%, a tracker mortgage would mean payments of 5.25% and 5.5%, which is the same as most fixed term deals being offered at the moment.
Lettings
We were pleased to launch 13 rental properties to the lettings market in September and October—up 20% on last year. The variation in what homes are available to rent includes more family homes. With homeowners enjoying high equity, they can release some money and let their home out, allowing them to travel, or have a complete change of area, with the safety net of having an income and asset.
We agreed lets on 16 homes, reaching £1,505pcm on average, showing a 15% increase against the £890pcm average of September and October 2021. The timeframe between listing and agreeing is averaging at around 21 days, which is slower than we saw this time last year, perhaps due to more available stock.
232 new renters have been registered with us in the last couple of months, with our list of potential tenants now totalling 1,836. There’s been increased demand for family homes with gardens, so we continue to target similar properties to assist with the demand.
Buy-to-let mortgage interest rates currently sit at c.5.75-6.25% for variable mortgages on an 80% LTV, with the first five-year fixed term starting at 6.7%. Increase your deposit to 40%, however, and trackers starting at 3.74% become available to you. Considering the high rents being achieved in the area, for the right property, a rental investment continues to be a great place to put your money, especially with long-term equity opportunities in the areas we cover.
Adam Barker, Director, shares what he’s seen in the market in the last few weeks:
“We do expect a period of adjustment while buyers’ budgets decrease due to the rise in cost of mortgages and running costs, however, key motivations won’t change; people want to live in a good area, with good schools and transport links, and we’re lucky to live in such an area.
“Another important factor is even though budgets may be decreasing, and you may see some house prices decrease, even if the market does step back by 5% or 10%, or even as extreme as the highest estimates of 30%, most homeowners only move after a minimum of five years, meaning they’d have seen around 45% growth in house price in the last five years, still leaving them with additional equity in their home, and the benefit of five years plus of low interest mortgage repayments. Considering the property they then go on to buy would have seen a similar decrease in value too, the difference between selling price and purchasing price really wouldn’t be all that different to before any house price adjustment. In short, we remain optimistic for our local market and continue to see motivated buyers buying property.”
To discuss all aspects of buying, selling, letting or renting, contact us on 01525 40 22 66 or email ampthill@orchards.co.uk
