House sales have officially recovered and have returned to pre-pandemic levels. According to Rightmove, overall property sales have recovered the most in London post-Coronavirus, with agreed sales 11% higher than in March 2019.
Matt Johnson, Area Director at Lettings and Estate Agent JOHNS&CO, says: “Our data from the first quarter of the year revealed that new offers have increased by 85% compared to our statistics from the same period last year, and agreed sales have increased for us by 33%”.
These positive developments in the property market come amidst recent changes in the wider financial landscape. Recently, the Bank of England has increased its base rate for the 13th time in a row. Crucially, this time they have taken a steep rise with a 0.5% increase from a central rate of 4.5% to 5% – double the expected increase of 0.25%.”
Matt continues: “We expect to see that this latest increase will have little impact on buyer demand or desire, as what we have seen since the initial shock rate rise from 0.25% is that buyers are not put off by rises.”
“Although the mortgage market is currently seeing a bit of a rollercoaster, with lenders pulling products and increasing rates, they have begun to release 100% mortgage products, indicating their continued confidence in the long-term property market. As the cheapest mortgage rates continue to be longer term fixed for five or ten years, this illustrates anticipation from lenders that the base rate will fall and the cost of living will ease over time.”
As a result despite increased buyer demand/activity we are seeing prices across London remain flat with buyers being price sensitive in light of interest rates and cost of living. Therefore, now remains a positive time for buyers looking for investment properties.
Additionally, demand for rental properties remains at a high. According to Zoopla’s Rental Market Report, demand for rental properties remains strong in urban areas, particularly in London and the South East, despite private rented housing supply growing by just 1% since 2016.
Despite increases in cost of living, rental demand and prices remain up year on year, more crucially JOHNS&CO’s current tenancy renewal rate is 65%, which is an increase on 2022’s figure. This indicates that despite rising costs, the majority of tenants continue to renew their tenancies with 95.3% of these renewing at an increase.
Matt adds: “Overall, despite the increase in mortgage rates, the property market is exceeding expectations and presents a promising and resilient landscape for both vendors and landlords. This is now an opportune moment for vendors to capitalise on the high demand for property and take advantage of the current market conditions while property demand remains robust.
“Landlords, on the other hand, have the chance to leverage the high demand for rentals and optimise their property to make the most of the present opportunities the market is offering. With the right strategies, both vendors and landlords can take advantage of the favourable market conditions for a positive outcome.”
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