DESPITE recent negative press on the housing market knocking confidence, Lakin & Co is still seeing a healthy level of sales enquiries, particularly from first-time buyers and landlord investors looking to take advantage of slowing house price growth and record low mortgage lending.
The greatest potential is possibly set to come from rising demand in lower value markets outside London and the South East where transaction volumes appear to be holding up for the time being.The London housing market is slowing down but was already facing turbulent times prior to the EU referendum. Brexit has inevitably compounded the challenge in the capital of high prices, low yields, unaffordability, tax changes for investors and a lack of value for money for overseas buyers despite the weaker pound.
It is worth remembering that regardless of all of the speculation around the impact of Brexit the essentials of the housing market have not changed.
Buyers have access to record low mortgage rates and with the latest data showing supply rising faster than sales for the first time in the last three years pointing to a slowdown in house price inflation, the imbalance between supply and demand will further increase – allowing for more of a ‘buyers’ market’.
It is also significant to remember that demand for housing has not suddenly declined following the vote but the question is whether buyers are happy to continue with new home purchases and if developers ease off from building new affordable homes, will a shortage of supply remain an issue?
Landlords are continuing to look to invest in the buy-to-let sector to take advantage of the strong rental demand. Demand for investment property has continued to grow steadily over the last few years and the dip in the buy-tolet market was expected following recent stamp duty and tax relief changes.
According to the Council of Mortgage Lenders this has already been reflected in lending volumes over recent months which are down by 50% on a year ago.
However, with the base rate reduced further and lower prices, investors and first-time buyers equally are likely to continue to look to purchase homes and invest their savings for a better return which will continue to affect the supply of certain types of property such as affordable family homes.
Mortgage lenders including Coventry Building Society, Santander, Barclays and Natwest immediately passed on the recent base rate cut to their customers but tougher affordability tests on new buy-to-let lending could further impact demand from landlord investors.
Where market conditions are changing, it is important your property is valued correctly. Lakin & Co’s knowledge of the housing market will ensure whether you’re selling or letting your property receives the best attention. So call 01895 544 555 for a free no-obligation property appraisal and find out how they can help you.