The interest rate rise which came mid-December 2021, has appeared to have little to no impact on the confidence of home buyers and sellers.
The latest data conducted by a popular property portal has shown that nearly three-quarters of current buyers have stayed confident that they would find, and purchase a property within the next 3 months. There was a marginally higher number of vendors who were equally as confident that they would sell their home within the 3-month period.
Jason Tebb, Chief Executive Officer for a housing platform, said: “Many would-buyers plotting a move has the foresight to secure a mortgage agreement in principle (AIP) in the final quarter of last year, so the clock is ticking for them to purchase a new home before it expires. With a number of lenders raising their mortgage rates on the back of higher money market rates, these potential buyers will be keen to move in the early part of this year or risk losing a favourable mortgage rate. This will focus buyers’ minds like nothing else and we expect activity to be brisk as a result.
“As well as buyers keen to take advantage of cheap mortgage rates, there are those who simply have to move. Family and financial circumstances and the impact of several lockdowns means sadly that many people need to move. These buyers are under pressure due to the lack of stick, which means they may be prepared to compromise on certain factors that they may not have been willing to do so before. This presents an opportunity for those considering selling who have not yet taken the plunge and listed their home.”
As buyers brought their decisions forward so they could take advantage of the stamp duty holiday, transaction numbers started to recover towards the end of 2021. With the stamp duty holiday being no longer available, it will be interesting to see how the market settles down over the next 12 months and whether it returns to something approaching normality, according to Tebb.
He continued: “The stamp duty holiday was a key driver in encouraging activity but there are many more spurs, such as the desire for more space, changing working practices and low borrowing rates, albeit mortgage pricing is creeping upwards, which will continue to play a part.
“What might change over the coming months is that house price growth may start to tail off. Speculative sellers may be waiting for the top of the curve in terms of pricing before listing their homes, but history shows us that trying to time the market is a difficult feat to achieve.
“With double-digit house-price growth in 2021, it remains the best time in two decades to sell and it could be argued that is it better to do so sooners rather than later. Vendors who hold off in the hope of further house price appreciation may then find themselves competing with more sellers once they list their home, with more competition meaning the inevitable downwards pressure on pricing.”