If you read the headlines you’d think we were going to hell in a handcart! Stubborn inflation means rising interest rates leading to some serious pain for the 800,000 borrowers coming off 2 and 5 year fixed rate mortgages in the next 6 months.
The Office for National Statistics today confirmed that house prices were still rising albeit at just 3.5%pa. Asking prices are also creeping up according to Rightmove although the number of price reductions is growing according to Zoopla.
We have tried to buy two properties this week going to ‘Best & Final’ offers on both despite trying to agree a deal to thwart the process. We lost both. Cash buyers pushed on 20% higher than our client for one property paying more than the property had been originally sold for at Christmas time. (The sale had fallen through because the buyer had become ill).
I’m still confident that prices are likely to slide rather than rise by 10% but as usual it’s not going to happen across the board.
So, back to the drawing board. My advice to all clients is to not get carried away. Things are going to get pretty bleak by Christmas and you should only commit to something if you can see yourself living there for at least 10 years. If you have to sell sooner then you may struggle to get your money back.