Property Market Update | July 2023
Mortgage rates have seen their first fall in two months, although rents have risen at the fastest pace on record. Meanwhile, a major credit rating agency is predicting a significant downturn in property prices, and we reveal the places where your home is likely to sell the fastest!
Read on to learn about the latest property market news on these topics.
Mortgage rates fall for the first time in two months
Following the news that inflation has slowed slightly in the 12 months to June, mortgage rates have also dropped slightly for the first time in two months.
With inflation slowing to 7.9% and the Bank of England’s next interest rate rise expected to be less steep than previously feared, the fall in mortgage rates will come as welcome relief for the thousands of homeowners who are remortgaging in the next few months.
The average rate on a two-year fixed deal has fallen slightly from 6.81% to 6.79%, and for five-year deals, it’s dropped from 6.33% to 6.31%.
The Bank of England will next meet on Thursday 3rd August, to announce the latest base interest rate, where it’s expected to increase from 5% to 5.25% – a smaller rise than initially expected.
Rents are on the rise
Private rents rose faster in June than at any point since records began back in January 2016.
The cost of renting rose 5.1% in England in the 12 months to June, and in Wales and Scotland, the figures are 5.8% and 5.5%, respectively.
Across England, the figures vary significantly. In the North East, the rise was less steep at 4.4%, but the West Midlands saw the biggest climb, with rents increasing 5.4% over the period.
The increases come against a backdrop of mortgage rate rises, which have doubled in recent months, resulting in landlords passing on the increased cost of borrowing to tenants. There is also a continued surge in demand for rental properties, which far outweighs the number of properties available for rent.
Property prices are predicted to fall by 12%
Economists at one of the world’s leading credit rating agencies forecast a 12% fall in UK property prices, with little rebound prospect.
S&P Global Ratings forecast the double-digit fall to bottom out by the end of 2024, with a decline of 6.6% in 2023 and a further drop of 4.9% in 2024.
Their forecasts predict a stagnant market in 2025 and 2026, with just 1.4% and 3% growth, respectively.
The forecasts are based on the fact that interest rates will likely remain higher than they have for the past decade, meaning a potential slowdown in the housing market.
While the figures are concerning for homeowners, they could come as a relief for first-time buyers, although as with any economic predictions, the figures should also be taken with a large pinch of salt!
25 locations where homes sell the fastest
Figures released by property portal Zoopla revealed the locations where properties are selling quickly.
On average, UK properties are selling in 30 days, which matches the five-year average. Twelve months ago, the figure was as low as 19 days due to significantly increased competition in the market, but many of the locations where the property is selling fastest are more in line with that figure than the current national average.
Joint-top of the list is Eden in Cumbria and Newcastle upon Tyne, where properties are selling in 21 days on average. They’re followed closely by Bristol, Carlisle, Knowsley in England’s North West and Waltham Forest in London, which all see average selling times of 22 days.
One of the more surprising findings is that these areas are all spread across England and Wales.
In total, seven of the locations are in the North West, three are in the North East, three are in the South West, three are in the West Midlands, two are in London, two are in Wales, two are in the East of England, and there’s one each in the South East, the East Midlands and Yorkshire.
For the complete list of locations, you can see the figures here.
The types of properties losing the most value
In a separate study by Zoopla, they revealed the properties that are losing the most value.
In a reversal of the ‘race for space’ trend during the pandemic, detached houses are seeing one of the most significant falls in value, with 43% of them seeing drops of at least 1% in the past six months.
However, it’s bungalows that are seeing the largest fall. 70% have recorded a fall in value over the past six months.
For more property news and updates and a more detailed overview of the property market, contact Maison Partnership. We are your local property experts. Call us on 0333 242 3292 or drop us an email today at concierge@maisonpartnership.com.
