Housing Market Shifts Show a Mixed Bag for Buyers

Your house is a significant piece of your personal financial holdings. And if you haven’t yet stepped on to the property ladder, buying a house may represent one of your financial goals. For most buyers, setting by a deposit is a primary concern, but there are other things to consider when buying a house.

Is it a buyer’s or seller’s market? What’s the prevailing interest rate offered on various types of mortgages? What it is your price range? Answering questions like these is a good start, helping you focus your home-buying effort. You should also consider general market conditions, which change relatively quickly. The more you know about the overall economy and trends within the housing market, the better prepared you are to make a prudent property purchase.

Tracking Trends

After a period of dramatically rising house prices, this year’s housing market has cooled. According to recent data, it takes longer for sellers to find qualified buyers on today’s housing landscape. Whereas last year’s customary waiting period, from the time a house was listed, until it sold, was around 16 weeks, The Royal Institution of Chartered Surveyors (RICS) indicates the length of time sellers wait has risen to 18 weeks.

In addition to houses remaining on the market longer than they once did, RICS research shows that through June, home sales had also declined for more than fifteen months, in a row. It appears estate books have historically low numbers of houses on their books. And the organization’s chief economist recently shared the view that there isn’t much happening in the real estate market that would indicate substantially increased activity in the short-term. Even landlords, it would seem, are thwarted in the current climate, with tax changes limiting the number of viable buy-to-let properties.

House prices have risen at an accelerated rate during some periods following the major economic collapse, experienced nearly a decade ago. Presently, however, prices are stalled. Halifax reports that through June of this year, house prices have risen at their slowest pace since 2013. The increase during this period was less than 2 per cent.

Will The Base Rate Rise?

The Bank of England (BOE) recently held the base rate at .5 per cent, rather than bumping it upward. Since then, economic indicators have shifted, increasing the chance of a rate raise during the month of August. Until word comes down from the BOE, base rate concerns are speculative, but the prospect has a direct impact on lending. .

As a credit consumer, it’s in your best interest to stay abreast of lending conditions, particularly if you’re working toward a house purchase. Helpful websites provide detailed information about most types of finance. From short-term funding for bad credit applicants, to conventional mortgage financing, online resources furnish lender profiles and information about financial products. In an ever-changing credit marketplace, comparing loans side-by-side gives you the tools needed to make informed borrowing decisions. And with a potential rate bump on the horizon, you won’t be caught off guard as conditions evolve.

Leading up to the August base rate decision, it appears more buyers have been drawn to the market. According to UK Finance, May showed the strongest performance so far this year, with the highest monthly total for new loans. However, should the BOE push the base rate higher in August, less favorable mortgage interest rates are likely to have the opposite effect on the housing and mortgage industry, thwarting growth in sales and lending.

Recognizing mortgage and housing trends increases your odds of buying the house you want, and securing an affordable mortgage. Conditions change quickly, so it helps to stay informed, using online resources to track interest rates and real estate market conditions. A rate hike looms on the horizon, so house sales may stall. However, even under these less-than-ideal circumstances, well-informed house shoppers can still find value in the property marketplace.

Paul graduated in 2001 with a degree in Finance. Since then he has gone on to work for several of the UK's most well-known financial institutions.

An avid blogger and a huge football fan, Paul is here to guide you through the ins and outs of personal finance and perhaps save you some money in the process!

Leave a Comment

Your email address will not be published. Required fields are marked *