In the interests of complete openness and transparency, our previous two columns have struggled to find a great deal to be positive about with reference to the present housing market. The well documented rapidly rising interest rates have caused an increase in the average length of time of marketing campaigns, a decreasing number of purchasers looking to part with cash or consider increased borrowing and the compounding effect of lots of property chains breaking down at various points through the process. The nature of a cyclical sector is however that the tough times are rarely as dramatic as they could be and equally the good times are never quite as indefinite as they appear to be at the time. Whilst not quite out of the woods yet, there have been a number of signs in recent weeks that brighter times may be on the horizon for both the regional and national property market.
The Royal Institute of Chartered Surveyors (RICS) continue to report a sharp decline in new buyer enquiries (-45% in July, a similar reading to the -46% from June) with a subdued outlook, principally due to higher mortgage rates. Whilst respondents to the RICS survey are certainly at the sharp end of housing market activity and their feedback is not to be dismissed, news of 11th August that Halifax, Natwest, HSBC and Nationwide have all cut mortgage interest rates by up to 0.71% suggests that the major mortgage lenders expect inflation and interest rates to remain stable with a gradual decrease on the horizon. Whilst we won’t know which of these viewpoints comes to pass until we get there, this is the first market comment since April that has seen projected mortgage rates cuts to this scale.
In terms of how this slight change in sentiment has affected the local housing market, we have seen a significant increase in sales conversion with buyers across the spectrum more confident to stick with a purchase on the basis that current conditions feel more stable than in recent months. Buyer activity is still very consistent (you will note more ‘sale agreed’ and ‘sold’ boards in the area than you would have done a few months ago) and our teams have a renewed spring in their step as more of their hard work is coming to fruition.
The lettings market still remains exceptionally hot as long term landlords look to recalibrate their portfolios in line with upcoming energy efficiency regulations in 2025 (should they come to fruition…) with tenant demand showing no sign of waning. We are well into peak holiday let season and whilst too many of our guests have left with the impression that Suffolk is permanently underwater in August, they have still had a wonderful time and we have had plenty of heart warming reviews extolling the virtues of our beautiful county.