Demand is slowing but still strong transaction data.
Demand remains above average but analysts are forecasting a weakening market as households feel the pinch with the cost of living rising. Mortgage approvals are 9% down and the government help to buy scheme ends this month.
Lifetime ISA
Support is still afforded to first time buyers in the form of allowance of saving into a lifetime ISA adding a government bonus of 25% onto annual house deposit savings of up to £4,000.
House Prices
Compared to August, house prices edged down 0.1% in September, falling for the second time in three months, bringing the average price to £293,835, from the previous August’s record high of £293,992. The prospect of interest rates continuing to rise sharply amid the cost of living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.
Outlook
The Bank Of England is expected to continue raising rates which will in turn exert a cooling impact on the housing market when this feeds through to already increasing mortgage rates.
Many middle class homeowners are coming off fixed interest mortgages to triple increases next year, many of which have second homes. As rates continue to rise, affordability of two homes (should the secondary one not be producing rental income due to increased living costs) may put a strain on peoples finances.
On the more positive side one must remember that property, especially UK property will always increase in value long term. There will always be demand in the UK through people moving here and through foreign investment who see the UK as a robust save haven.
Property is a hard asset that increases in value and produces a consistent dividend. The doom and gloom is always temporary, the noise is over exagerated and as always, though it may cool off, UK property will always coniue to strive.
To find out ways in which you can optimise your UK property position whilst the market is cooling off, talk to one of our FCA authorised wealth managers by arranging a Discovery Call [Here]
This article is for informational purpose only. It does not constitute finacial, tax or legal advice, nor is it a recommendation to buy, sell or hold any investment. Past performance is not a guide to the future, investments rise and fall so investors could make a loss. No view is given on the present, future value or price of any investment and investors should form their own view on any proposed investment.