A word of warning has been issued to anyone who is in the midst of buying a home after last week's Spring Budget. Any prospective buyers have been warned to 'brace themselves' as more property market volatility is expected once again.
Last Wednesday (March 15) Jeremy Hunt set out his plans for the economy whilst appearing in the House of Commons where he made a series of announcements due to impact millions of people across the UK. The chancellor revealed that the energy price guarantee will no longer be raised to £3,000 from next month, with other announcements including 30 hours a week of free childcare to be extended to children over nine-months-old.
After the key changes were announced, many homeowners were disappointed to hear little to no mention of help to boost the property market. Buyers and sellers were left worried after Liz Truss' mini budget last year which saw house prices plummet and mortgage rates soar as a result of several interest rate rises.
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Off the back of the Spring Budget, a property expert has now warned buyers to 'brace themselves' for unpredictable movements within the property market as fixed-rate mortgages are beginning to rise yet again.
According to Jason Tebb, chief executive officer of OnTheMarket, buyers and sellers should expect some difficulties in the coming months.
In the latest sentiment index from property search portal, Jason warned: "There are still challenges ahead, particularly in regard to inflation, but concerns seem to be short-term rather than medium to long-term.
"Borrowers may need to brace themselves for further short-term volatility in pricing as fixed-rate mortgages, which soared in the autumn before edging downwards earlier this year on the back of falling Swap rates, are now being repriced upwards again.
"Such volatility is bound to impact buyer and seller confidence, creating short-term pressures for borrowers with high loan-to- value mortgages in particular.
"Despite ongoing concerns about the cost of living and rising rates, many people still need to move, but as buying power is reduced, sellers must be more realistic. Now, more than ever, it’s important to speak to an experienced agent who understands local market conditions, to get an accurate valuation."
On a more positive note for sellers, Jason added: "February felt like ‘business as usual’ for the housing market. There were no radical shifts either way in buyer or seller sentiment, while Nationwide’s house price survey for February reported a modest year-on-year decline in pricing rather than a dramatic fall.
"The market continues to rebalance in a remarkably measured way considering the financial market turbulence in response to September’s mini-Budget. Our data shows 62% of sellers were confident they’d sell their property within the next three months in February, an increase from January’s 60%.
"Interestingly, the overall number of vendors confident about selling within six and nine months declined by 1 percentage point, while those confident about selling within 12 months remains unchanged month-on-month. It appears that sellers are more encouraged by the longer-term outlook than the shorter-term.
"Our data also shows that despite rising interest rates and the cost of living, buyer sentiment remained reassuringly steady in February. 69% of buyers were confident they’d buy within three months, the same percentage as in January. The picture was fairly consistent across the country with no standout regional shifts in buyer sentiment, suggesting that the market’s rebalancing isn’t causing too much concern."
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