We asked our Regional Director, Mark Lawrinson, to share his thoughts on the current market. Here’s what he had to say….
Mortgage rates won’t stay this low forever…
As we head into autumn, we have a relatively settled market for the first time in several years. The main reason being - there is nothing significant looming. The uncertainty of this year’s general election, and even the hangover from the Olympics that was seen back in 2012 are all but a distant memory.
Now is a great time to sell; mortgage approvals have increased to their highest level for years, and it’s looking likely that the base rate will remain at its current all-time low well into 2016 - a key consideration if you are thinking about taking your next step on the property ladder.
Alex Smith, Mortgage & Insurance Adviser at Capricorn Financial Consultancy, reinforces this, stating “forecasts for when the Bank of England will increase the base rate have shifted once again... now, with inflation in the UK still barely above zero, and the Chinese economy faltering, the market expectation of a base rate increase has settled around September 2016.”
Alex goes on to say that “many lenders are behind in their 2015 lending targets, so we expect the cost of fixed rates for residential mortgages to drop in the final months of 2015 as lenders try to catch up. In most cases there is little to no premium for a fixed rate, and with around 90% of borrowers opting for this type of product, this will be welcome news for those looking to purchase a home in the final months of the year.”
So why not capitalise on the current market, move into your next home and lock into a current historically low rate?
Sell first, buy later
A shortage of stock in the London market has seen demand outweigh supply and property prices increase, but the heat has come out of the market of late, and the rest of the South East and the Northern Powerhouse is now beginning to grab the property price headlines. With this in mind, holding out for any further significant gain could be a never ending wait.
Shortage of stock is born from two things: lack of housebuilding and the commonly held belief that you need to find a new property before you sell. Contrary to general belief, you are not actually at a disadvantage if you haven’t found a house to buy before you put your house on the market. In fact, it’s often possible to agree a sale at a great price with completion not happening for 3 - 6 months.
A good agent will be able to help you manage timescales and the expectations of all involved, and also help you find that next home.
Is London still the property hotspot?
The prime central London market has suffered the most over the past year as a result of the potential threat of a mansion tax, the change in stamp duty, and capital gains tax for foreign investors. It’s no surprise therefore that transactions over the £1m mark have reduced significantly. This is not a sign that the international clients have left London, however. Instead, they are now focusing on the wider areas of London. Crossrail is due to open in December 2018, and it will directly connect the wider areas of London to the prime areas. London remains a safe haven for investment and property in the capital is seen as the strongest commodity around the world, so we expect foreign demand to remain as strong this autumn as it has in recent years.
Mark Lawrinson (MNAEA, MARLA) is Regional Director at Portico, with endless enthusiasm, experience and knowledge of the London property market. Follow him on Twitter, and keep up to date with Portico on Twitter, too.
How can we help?
At Portico we will support you through every step of the sale process. One of the most useful services we offer as part of our Concierge package is our interior styling service before we send in our professional photographer. We also have an in-house team of tradesmen who can help you refurbish your property before we bring it to market and we can offer expert advice on the best mortgage deals.
If you’re thinking of selling and want to get the best price for your property, give us a call on 0207 099 4000.