RENEWED OPTIMISM: is now the time to make your property move?

As we enter the autumn, there are reasons for renewed optimism in the residential property market whatever your point of reference on it.

August saw the Bank of England monetary policy committee cut the base rate by a quarter per cent to 5%, the latest in a series of interest rate changes that have had far-reaching consequences on prices and activity.

In the US, current indications are that the Federal Reserve will soon start to cut rates, perhaps by half a per cent.

If this happens, it will add to the Bank of England’s room for manoeuvre to make further cuts on this side of the pond.

Competitive deals

The August cut complemented was already in train, a ‘price war’ between mortgage lenders that produced more attractive, competitively priced fixed-rate deals for borrowers.

Lower mortgage rates has prompted a big rise in activity, around 25% up on previous years, with many new buyers deciding the time is right to enter the market.

The mood of cautious optimism reflects the stability afforded by better-than-expected inflation figures, albeit the headline rate was slight up again in August to 2.2%.

House prices

Looking at the health of house values, the average price for a house across the UK is now 2.4% up on a year ago according to Land Registry data.

In Portsmouth the average price is £246,000. The breakdown is: detached – £492,000; semi-detached – £339,000; terraced – 265,000; and flats and maisonettes – £174,000.

While the local house price average has fluctuated down 4.4% on June 2023, the overall trend is still well up on the pandemic period.

Portsmouth has seen a 14.62% rise in the average compared to the July 2020 figure of £214,250.

For landlords and investors seeking returns on property in Portsmouth, the monthly average private rent has risen to £1,279, a 10.2% increase on the summer of 2023.

So, in several respects, it’s a positive start to the autumn.

This is coupled with a longer-term outlook enhanced by the prospect of more homebuilding due to proposed government reforms in the planning system.

Resilience

There are other factors at play that we anticipate will have market impact.

For example, in the private rented sector the government has announced its intention to increase tenant rights, abolish no-fault evictions and reform grounds for possession.

And for those looking to buy, sell or move, remember that the current threshold for paying Stamp Duty is set to expire in March 2025. This will mean that more people, including some first-time buyers, will fall within the ambit of the tax.

The local property has remained resilient despite the economic shocks of recent years and is well placed to stay robust and grow as we approach the end of the year and beyond.

Market stability and momentum should give buyers, sellers, landlords and tenants the confidence they need to make the right property-related decisions for their circumstances.

Best advice

As ever, it is crucial to work with an experienced and knowledgeable adviser who fully understands your needs and will help with all you need to know when it comes to property transactions.

If you are a homeowner, landlord, tenant or prospective seller or buyer, and want to discuss your next property move, we’re here to help.

Contact us on 02392 826731 or visit www.chinneckshaw.co.uk.

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