Navigating the Property Market: Expert Advice and Guidance from Eyesurvey
What should I do in present property market conditions?
Many people are understandably concerned about the present situation relating to the property market, with prices uncertain and interest rates recently increased.
We can’t give you financial advice – though we do have financial advisers we can introduce to you, if you wish – but we can offer the benefit of well over 50 years’ experience and dealings in property, to guide your next decision.
Surveyors have to study the “dismal science” of economics, as part of their training, as since it affects prices and market activity. We need to understand how the economy hits our markets, not just in the UK, but across the world.
The substantial and rapid rises experienced in the past two years have clearly come to an end, though there are local variations. Will prices fall suddenly?
We have seen several of these cycles over our many years working in property, and after periods with sharp prices rises, the market invariably levels, and some falling-back is normally the next stage. If the economy generally is weak, these setbacks are likely to be larger, and may last longer before some recovery sets in again.
Over those times we have been in the property profession, and over the longer term, prices have shown a steady rising trend overall – so property is a good investment, if you don’t always expect to “get rich quick”.
How about interest rates jumping?
The main tool the BANK OF ENGLAND has to help bring inflation under control is to alter interest’s rates, and don’t forget we had several years when interest rates were only about 0.25 – 0.5%. We are now seeing the rates coming back up, in response to rising inflation. Inflation is the result of prices for goods and services increasing from one year to the next, and it erodes the value of your money. That’s what economics is about, and it’s a complex topic.
You may find it hard to believe, but the war in Ukraine is partly responsible for the increase in prices of oil, gas and the costs of wheat for bread, sunflower seeds used for cereals and vegetable oil production. All those commodities have had supplies disrupted by the war, and shortages always cause prices to rise. It’s been seen across the world and doesn’t look like ending yet. Even if some countries have seen price increases slowing down, but not in others as yet, the laws of supply and demand will eventually bring price rises down, and inflation will then fall. Once that happens, interest rates can come down again, and that lets the brakes off all market activity, and speeding up the economy, which is good for us all.
So then, what do I do, you ask?
1. That new home will possibly be cheaper next year – but it might not be, or the one you really want, which you’ve just seen and wanted to buy. Do you go for it now, or chance not getting the house you fell in love with when you viewed it? If you can afford it, we suggest you go ahead – any price fall probably won’t happen next week, or next month, and may not happen at all.
2. Will my mortgage cost more in a year’s time? It might – but you could apply for a fixed rate mortgage deal to stave the rises off for up to five years. But you now ask, couldn’t rates be a lot lower in five years or less, and I’ll then be stuck at the rate at which I fixed? Yes, of course that’s possible. At least one broker we know is advising clients to go for a “2-year tracker mortgage” where the interest rate follows the Bank of England base rates. If it rises, it rises, but if and when it falls, your loan gets cheaper – or you might refinance at a fixed rate, or maybe get a “discounted rate” at that time. Ask your broker for specialist advice on your own circumstances.
3. What about jobs? We can’t tell you about how secure your job may be, but wages can’t keep being increased if your employer is having trouble paying his running costs. So, you can’t count on a pay rise, and might be safer being careful to stay within your own spending abilities and budget carefully.
4. What if I can’t pay my way now? – there are special organisations who provide free guidance on debts, of inability to pay the bills, including the Citizens Advice Bureau, with branches in main towns. Don’t be afraid to contact your mortgage lender, to ask if they can help you adjust payments for a while. Your present loan may even have the right to take a “payment holiday” of several months. Obviously, you’ll eventually have to pay to catch up in future. BUT PLEASE DON’T DO NOTHING – you are likely to find your troubles get worse.
We’re not fortune tellers, and we can’t see the future. But this gallop through history does tells us what you’re probably going to see coming along. We hope it’s been useful to you.
For advice on property matters, remember that the team at EYESURVEY has been in the property profession for over half a century, giving our honest – and what we believe has been impartial – advice.
EYESURVEY serves a wide geographical area, encompassing Essex and some South Suffolk postcodes (CO, CM, SS, RM, IG & IP). The locations covered include Ipswich, Colchester, Chelmsford, Braintree, Southend, Romford, Ilford, Clacton, Grays, Harwich, Maldon, Manningtree and more.
Les Long FRICS FISVA Principal, Eyesurvey
Contact EYESURVEY Chartered Surveyors here for all your professional property services and needs.