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Hopeful Home Buyers Not Influenced by Election and Stay Focused on Homeownership

Hopeful Home Buyers Not Influenced by Election and Stay Focused on Homeownership

Hopeful home buyers had hoped the upcoming election would impact the housing market and their dreams of becoming a homeowner would be made an easier endeavor. The result, however, is less than expected and according to the online property listing website, Rightmove, house prices are not likely to decline to the levels that would make home buying more affordable. The average house price remains near the record high in June, and the Bank of England’s Monetary Policy Committee (MPC) voted this month to keep the standard base interest rate steady at 5.25%. Asking prices are high and so are interest rates, yet home buyers remain.

New homes coming to the market are being priced higher with no fear of demand declining. Rightmove reported the average price of homes being newly listed over the past four weeks was £375,110. This is only £21 less than the record high posted for May.

Home buyer demand has increased by 5% and agreed upon sales increased annually by 6%.

The average house price grew in areas with less expensive properties available on the market, while pricey London and the higher priced area of east England recorded the only average house price declines.

Rightmove reported a decline of 3% in the number of high-cost properties coming onto the market compared to this same time last year. While just two weeks ago, the volume was 11% above those coming on the market last year at this same time.

Rightmove considers the decline in this part of the housing market as a signal of caution as homeowners await the coming weeks to see how things unfold in the election, economy, and housing market. It might very well be lack of demand in the higher priced housing market is due to the MPC holding the rate steady and pushing home buyers targeting these properties to the sidelines to await lower interest rates to save money.

However, in a survey by Rightmove of 14,000 respondents, 95% denied the election would have any impact on their plans to move home.

Tim Bannister, Rightmove director, remarked, “It is always difficult to predict how home-movers will react to sudden uncertainty, but the market activity has remained largely steady this time.

“Our poll of more than 14,000 people also supports the data, with the vast majority of respondents carrying on with their home moving plans.

“However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top end. Overall, it appears to be business as usual for the mass market.”

Halifax, Britain’s largest lender, reflected the opinion of Rightmove, remarking the housing market has remained resilient despite higher interest rates. They credited rising wages and confidence in the economy as driving continued attention in home buying.

For borrowers, especially home buyers seeking mortgages and homeowners shopping for remortgages, waiting on the MPC to cut the base rate is not necessary in finding attractive deals. Some lenders, anticipating the first MPC vote to cut the base rate since March 2020 to occur in August, are lowering their offered interest rates slowly but surely. In fact, many began doing so this week. 

The realization that the MPC, when they do cut the base rate, will likely offer a slight slice at the rate of perhaps only 0.25% rather than trigger a rise of inflation, should bring peace to those choosing a lender rate now. Mortgages and remortgages are likely already reflective of what would be expected from lenders in August if the rate is indeed cut then. 

Experts advise borrowers to shop around and compare offers. They also encourage home buyers and homeowners to consider fees when shopping for deals. The fees associated with the lowest interest rate offer could cancel out any savings in comparison to the slightly higher interest rate with lower fees.

While home buyers will still face higher asking prices, they will help the housing market remain resilient with their ability to see beyond the ready to move in dream homes for the properties in need of attention and upgrading as well as the properties often overlooked in outlying areas. This in turn is good news for homeowners watching the equity in their property grow as they qualify for lower interest rate remortgage deals due to their better loan to value (LTV) ratios.

Homeowners interested in the current remortgage offers available have only to shop online for quick and easy quotes. Home buyers can easily shop for properties online with websites like Rightmove and discover their own dream home or soon to be dream in the making home.

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