Uncertainty has reigned both nationally and locally in the property market over the summer months, fundamentally due to 14 consecutive interest rate rises which finished when the Bank of England’s Monetary Policy Committee held rates at 5.25% in September. Stubborn inflationary pressures have continued but appear now to be easing, with inflation falling to 6.7% through August. September’s figures are eagerly awaited but reports in early October that food inflation had fallen for the first time in 2 years do point to some light at the end of the tunnel. Challenges do remain with petrol prices rising again and the ongoing supply issues caused by the continuing war in Ukraine.
Unsurprisingly there has been a cautious reaction from both Buyers and Sellers to the ongoing turbulence that has led to an annual decrease in property prices of circa 5% nationally. Regionally the East of England saw a small increase in house prices up to the end of July with London and the South West falling into negative territory while London and the South West fell into negative territory. However, the picture closer to home has shown a stronger fall in Hertfordshire. The volume of sales both nationally and in Hertfordshire last year was significantly down on 2021 and the number of completed transactions in 2023 is likely to be as low as we’ve seen since the Referendum to exit the EU that led to the decline in the market in 2018.
There are, however, positive signs that we are reaching the end of this difficult cycle for the housing market. Inflation numbers to be reported on 18th October will be a clear barometer as to whether the direction of travel for the cost-of-living crisis is moving in the right direction. This in turn will give the Bank of England confidence to make no further interest rate rises which will provide some welcome relief to mortgage borrowers who make up a third of households in the UK currently.
In recent weeks we have also started to see strong discounting from the 5 major lenders bringing down rates across 2, 3 and 5 year fixed deals.
Market Outlook
The balance of supply versus demand has shifted with more homes now being available than at any time this decade. For those that are able this presents a significant opportunity to work within the market which provides a huge range of choice for the consumer. So far this year Ashtons have agreed more sales throughout Hertfordshire than any other estate agency brand. Whilst achieving 98.3% of our Sellers’ guide prices year to date. The remaining months of the year will determine how the market shapes up for the new year. If the current trend continues with falling inflation and interest rates reducing, or even just stabilising, then a more dynamic market will appear as we return to work following our Christmas break.
If you are making plans to move, either now or next year, knowledge is essential. At Ashtons we have over 40 years of providing our expertise to our local market, giving our clients confidence that whatever their goals they can be certain to achieve them at Ashtons. For an expert perspective on the current market and how best to plan for the coming months and years contact our team today to arrange a detailed appraisal of your future financial and lifestyle planning.
