Before we start our first blog of this new year, we hope all our clients and their loved ones had a fruitful Christmas and gentle start to 2023. And we trust that many New Year resolutions remain intact.
As we look forward to the next 12 months, the Team at Robb Residential wanted to focus on the Scottish residential sales’ market, and to consider the topics that continue to dominate both the popular and property presses.
The Coming War on Mortgages?
As the cost-of-living crisis continues to dominate headlines in the UK, one key component of that is the cost of a typical mortgage – luckily, there is some light at the end of the tunnel.
After the shock of the mini-budget that caused the Bank of England to intervene and buy UK Government bonds in late September, some level of normality has returned. This is partly led by the more measured approach of the Sunak government, along with better communications and more openness, as well as a natural calming of nerves after the previous administration’s roll of the fiscal dice, only to depart in some humiliation.
With some prudent economic management now in place, and the Trussian chaos behind us, the spike in mortgage rates has been replaced by the UK retail banks targeting mortgage market share, primarily by cutting rates across many offerings. And the number of available products has risen, too.
As Forbes magazine reported (here), not only are fixed rate deals down by between 1.4% and almost 1.8% since late September, but the number of options has increased to around 4,000. This might be well shy of the 5,300 on offer in December 2021, but it’s vast improvement on the low of around 2,500 after the Truss administration’s financial car crash. All in, this is good news for house buyers and owners dependent on a range of products to meet their needs and at the right “price point”.
And this is key, too, as reported on Radio 4’s Money Box. Ongoing advice when needed is important. It’s expected that in the next year, one million mortgages will come up for renewal at the end of their fixed rate period, and at least the downward trajectory in mortgage rates provides some solace. As does the inflation trend.
Early 2022 the Bank of England repeatedly reported a target of 2% for inflation, but few expected this would involve a detour around the +10% mark and that rises would be mirrored across Europe.
For months the direction of inflation had been unflinchingly upwards, but recent figures have shown a cooling and a small fall. Sky News reported that inflation last month (December) dropped from 10.7% in November to 10.5%, and that both those were improvements on the 41-year high of 11.1% in October.
This, and a bit more fiscal sanity allow for some optimism in the mortgage market. And it will be important to see what will be decided at the next BoE Monetary Policy Committee Meeting on February 2nd.
2023 Sales Market
Based on the above, and the slowing of the market we witnessed in Q4 2022, Robb Residential see an opportunity for those contemplating a move. The uncertainty – and some of this will remain, as the cost-of-living issues persist for many, and the impact of strike-led wage hikes has still to be understood – means that stock levels across the sales landscape continue to remain low as some await clear water after recent mortgage chaos.
This allows for owners considering a sale to list in a period of low stock, catching the attention of buyers, those not impacted by mortgage concerns as they could be downsizing, making a career move, or are otherwise lucky enough to not feel the pinch of the current economic malaise. In fact, the general sales’ market is driven by many who cannot choose when they wish to sell; nor is it dictated by those trying to anticipate where the bottom of the market might be. For the vast majority of home buyers, a property is a long-term investment in bricks, mortar, and family contentment and certainty, and although prices have been falling, it’s now expected that matters will level out at mid-2021 prices.
Yes, there has been talk of a property price collapse, but it’s now much more likely that we’ll witness a gentle decline as the market and those in it adjust to new interest rate levels and expectations.
Vendors wishing to come to the market now will benefit from being obvious to a buyer community likely committed to a move and change of scene, willing to enter a market where well-priced properties will achieve the right price. As ever, Robb Residential are well placed and as committed as ever to delivering the same professional, high-quality and tailored services across Sales (and Lettings).
As a reminder, we welcome all clients established, new, potential and those just considering that next move to pop into our new offices for a tea, coffee and a chat on all residential property needs – The Beacon, 176 George Street, Glasgow, G2 5SG. We cannot offer financial advice, but the whole team would be delighted to discuss all things property and how we see the current and future market playing out.
Robb Residential are an Estate Agent based in Glasgow who deal in a range of unique and beautiful properties in the middle-to-prime market in Scotland. For more information, please contact us, email or call on 0141 225 3880.
Note: all statistics, percentages and references are correct at the time of writing.