A helium balloon rises in the sky and stays afloat for some time, depending on the size and the temperature. The property market seemed to be similar over the last few years since the pandemic hit, leading to an all-time high with the rush for property purchases. Then, with the slowing of the economy and inflation, a slight downward trend in affordability and property prices took historyglow place.
However, the interest in buying property remains high and, as long as demand exceeds supply, the market will continue to do well. Those involved in the property market acknowledge this fact, including the property sellers in Burnham On Sea.
Revival of the market:
There are many signs to show that, despite the slowdown in the property market, there will be a revival:
SDLT – Stamp Duty Land Tax: With the zero tax scheme available for properties valued up to GBP 250,000 extended till 31 March 2025, it gives potential buyers (especially first-time buyers) a chance to avail of the opportunity to purchase property with a big saving on stamp techybio duty.
Mortgages: The Government’s 95% mortgage scheme is available till December 2023 and allows a minimum deposit of just 5% of the property value. Due to this guarantee scheme, other lenders have also started offering lower deposit mortgages. Even though interest rates and fees may be higher with low deposits, many first-time buyers are looking at taking advantage of these offers. Also, they are beneficial to homeowners wanting to move due to the lower property prices and smaller deposits.
Rental market: Rentals are still popular, despite rents having been on the increase and taking up a large percentage of the tenant’s income. Landlords are facing extra expenses in mortgage payments and renovations to comply with energy conservation and other regulations. This has led some landlords to increase rental rates. Quite a few current renters are looking at long-term benefits by investing in property, taking advantage of the lower asking prices and other offers. For those investors interested in buy-to-let, it is a good time to consider property purchase and earning a profitable ROI (return on investment).
Locations: London has been known for its expensive buildings but, during the pandemic, price growth in the city was not as high as in the suburbs. London is a prime market and having property there is an asset. Hence, the interest in property investment in the big city remains strong, while prices are not likely to fall to an absolute low. Also, areas in the South West of England like Somerset are very popular and the demand for property there is still high.
Role of Housing in the economy: The government realises how much Housing contributes to the economy and is focusing on new builds and conversion of some derelict commercial properties to residential, within the strict norms. The availability of more property will definitely lead to more overallnetworth sales.
Property prices under pressure:
Cost of living: Despite people wanting to buy their own homes, inflation has forced some of them to put their dreams on hold. This has lessened, in some instances, the interest in purchasing a property. The result of this apathy has brought pressure on sellers (especially those needing to sell quickly) forcing them to lower their prices.
Time to sell: The factors of income versus cost of living as well as mortgage availability have resulted in properties taking longer to sell. This, in turn, has led some sellers to reconsider the current market and lower their selling prices from their original asking prices.
Bank rate: Due to the economical situation, the Bank of England has increased its rate to 4%. The high-interest rate has taken its toll on potential buyers, resulting in panicky sellers coming under pressure to reduce their selling prices.
Conclusion: However, this is just the present phase. With the revival of the economy and the employment market becoming more resilient, fears of a recession are subsiding. According to an authorised source, “Transaction levels will come down from the heights seen during the pandemic and we expect prices to fall by a few per cent but the evidence is that 2023 will be a solid year for the housing market.” Even though predictions do not always come to pass, it looks like the “bricks and mortar” will remain strong, leading to greater heights in the coming years.