As we head out of summer and into the next season, the property market represents a similar state of change. In our latest Market Comment, we take a look at what’s been going on at Orchards over the last two months…
Sales
July and August saw us list a wide selection of properties to the sales market, from a £1.5million 5,000ft² period townhouse, to a £155,000 one-bedroom apartment. In our area, 204 homes were made available to purchasers over this period, compared to 207 in the same two months of 2022. This very minimal decrease shows homeowners aren’t scared of selling in what’s been deemed a difficult market. Prices have seen a dip as they adjust to affordability across the nation, but this as always is relative to any onward move.
Once a home hits the market, we’ve accepted an offer on average within 54 days. Slower than the same timeframe in 2022, a reduced level of competition and a heightened degree of caution are at play. Comparing our timescales with our competitors’, we’re marking properties as Sold STC 34% sooner, having sold over£13million worth of property during this period.
The last couple of months have seen completion rates decrease, with £6.15million worth of property completions in July and August 2023, and £8.35million worth of property completions in July and August 2022. This is likely due to reduced sales figures earlier in the year following tighter budgets and a more considered approach to big decisions.
Comparing sold prices during these two months, there’s been a 7.5% decrease between 2022 and 2023, and we’re confident that as the economy settles, so too will house prices. Once an offer has been agreed, we’re seeing completions take place within 14 weeks. This is faster than last year, when solicitors had more stacked workloads.
As for mortgages, it’s not bad news. Interest rates are slowly coming down, and lenders are becoming more competitive. For a fixed term, rates start at 4.9%, and for variable rates, these start at 5.39%. Our valuations will take into account what buyers’ budgets are telling us, and what’s then a realistically achievable price.
Lettings
Over to lettings. We listed 17 properties for rent in July and August 2023. With 16 listed in July and August 2022, this is a 6% increase. More and more people are waiting in the wings for a rental property, and once again demand does not match up with supply. Our list of pre-approved tenants is long, and we’re always looking for landlords with suitable lettings properties for them.
Rental prices have been steadily increasing, and still continue to do so. Lets are being agreed in 10 days, due to such high demand for rental properties.
For a buy-to-let mortgage, interest rates are available at 4.94% for interest-only on a 75% LTV for an initial two-year variable rate, or 5.59% on a five-year fixed-rate term.
If looking to let a property in and around Ampthill, homes here are desirable, the area is aspirational, the connections are highly convenient, and our schools are sought after, making an ideal investment.
Adam Barker, Director, shares his stance on the current property market
“The market has been seeing an adjustment period, and the truth is, for buyers, be it investment or owner-occupiers, the cost of a mortgage is significantly more this year compared to last year. Fundamentally, that’s affected affordability across the board.
Contrast to that, however, for the past five years, the local market has seen tremendous growth of between 10% and 20% annually. Even at the more conservative projections of 10% annually, when taking into account the compounding effect of that price increase, a property at £250,000 four years ago is likely worth £366,025 today. That’s a 46% increase, and a healthy chunk of cash equity to reduce the mortgage burden.
A lot of people have likened the current situation to the housing market crash in 2008 due to similarities in interest rates, with the average mortgage set at 6% in 2008. But the main difference was that the banks were the ones facing financial pressures, calling in their borrowing, and forcing properties onto the market, then reducing the number of mortgage products available, meaning more properties available for fewer buyers.
As we see it, the market is mindful, and buyers want reassurance they aren’t overpaying for houses. Vendors are having to be aware of this, and price accordingly.
The rental market continues to be strong, however, I personally believe due to the cost of living, the rental price increases are likely to start slowing down in order for them to remain affordable for tenants.”
To discuss all aspects of buying, selling, letting or renting, contact us on 01525 40 22 66 or email ampthill@orchards.co.uk
