15 Nov Property experts recommend buyers focus on affordability over interest rates and don’t stop your planning if you want to move
Three prime ministers within three months, a mini budget that threw the market in to turmoil, leaving the banks overwhelmed with a large number of mortgage applications and pulling a number of products, resulted in mortgage rates spiking above 6% and an uncertainty for the UK’s economic outlook.
Despite this, as the bank rate increased 0.75% to 3% last week and the government made new promises, the outlook for mortgages has improved and the mortgage rate has fallen by 1.25%, currently pointing to ending the year with average mortgage rates at just over 5%. The Guild of Property Professionals stated recently that rather than focusing on the interest rate on mortgages, buyers going forward should be focusing on what they can afford on a month-to-month basis.
If you are thinking of moving to Virginia Water, take some time to browse our properties for sale in Virginia Water and the surrounding areas. If you have any questions, you can also visit our award-winning website or call us on 01344 843000 and email us.
Focus on affordability over interest rates
Inflation is at the highest level for 30years. Since 1975 the Bank of England base rate had not been below 4% until it dropped in 2003 to 3.5%, then rose to 5.75% and then after the financial crisis of 2008 dropped to 0.5% in 2009. The upward trend we are seeing now with the base rate should been seen as a return to the norm and affordability going forward needs to factor this in. The base rate is increased with the aim of bringing inflation down, and to discourage people from borrowing if they can’t afford it.
Cheap borrowing is no more. We will start to see a 5% mortgage rate as the norm, this returns us to where the country used to be in the long-term averages of interest rates. Interest rates are something that will continue to change and fixing a mortgage for a specific amount of time is one way to manage your finances.
If you’re a cash buyer, or already have your loan secured (such as porting an existing mortgage), the position you are in is less affected by the changes in the lending market and affordability will rely more on the cost of living and energy prices, so looking at your monthly affordability is key when thinking about moving house.
Don’t stop your planning if you want to move
The driving force behind moving should be that buying property is a medium to long term investment, especially as statistically any home owner who has had their home for 10years or more will have seen a significant increase in the value of their property. The current situation where economic factors are pushing up rates to combat inflation shouldn’t be seen as a barrier to making a property purchase. The wider economic backdrop can move fast.
If you are thinking of moving, experts have said don’t put a hold on your plans as buying a home with a mortgage can take anywhere between 3 to 9 months and a lot can change in that time.
We are seeing cash buyers moving very quickly and homes selling and completing in just a couple of months. The number of buyers’ vs property available in the area is still high with most competing on price to secure their next home in time for Christmas or the new year.
2022 so far has been a strong year for property
Many sales are still going through this autumn. An ongoing shortage of supply vs buyers means that prices with remain buoyant for the rest of the year with any impact on house prices not being felt until 2013.
The average house price increased by 8.1% over the last year, owed to the strength of demand and the number of sales agreed in the last 6 months. Any small drop in price will not be significant against the price that properties have sold for in the last 12 months.
Better value for your money
The pandemic and working from home has encouraged buyers to seek more for their money. Moving out of prime areas such as Central London to the suburbs can see buyers receive better value for their money in terms of space and surroundings, and still have a reasonably quick commute to the city and airports.
Virginia Water with its lavish green spaces is voted as one of the best places to live outside of London. Our expert team are on hand to provide advice and we have a number of homes that are ready to sell, a pool of off market also, so do get in touch if you are thinking of moving to Virginia Water.
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If you are thinking of moving to the area, buying or renting a property, make sure you take a look at our amazing catalogue of properties for sale in Virginia Water and the surrounding areas.
If you’d like to speak to someone about properties to let in Virginia Water, a member of our expert team would be happy to help. You can call us on 01344 843000 or email us. You can also follow us on Facebook, Twitter, Instagram, and LinkedIn.