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With most buyers, sellers and property owners getting their property information on the latest news, it’s important to take a look every month or so at what they are telling people about the property market. When researching this, one thing I was quite surprised about was there are some stories about prices falling, or growth slowing, but not as many as I thought. In the last quarter of 2022 and at the start of the year, many of the stories were comparing this year to the crashes we saw in the 1990s and during the credit crunch. However, as the market is, so far, holding up better than expected, these seem to have subsided.

Most of the stories are now about how tough it is this year for first time buyers, but the biggest focus is, understandably, on mortgage costs soaring and products being pulled. Indeed, Labour is fuelling some of these stories with their latest claim that the Conservatives have added an average of £7,000 to the cost of people’s mortgages this year. Source

Fear story

For me, it’s this ‘fear’ story that needs to be put into context and as an industry we need to make sure that people take a proactive approach to remortgaging, or indeed choosing whether to buy now or not. Firstly, just because base rates are now likely to rise to 5%, depending on the level of equity in a home, it doesn’t mean this is the rate you pay. Many people benefited from price growth over the last few years and that will hopefully have improved their loan to value so they can access some of the better rates, which could be as low as 4%, on the market.

Secondly, we need to make sure that people don’t put their head in the sand if they are coming off a fixed rate this year, and secure help from a mortgage broker at least six months – or more – before their rate ends, so they can take time to prepare for a higher rate.

Thirdly, for those that bought last year, it’s important to remember that even if they see their property fall in value a bit this year, they are still in a good position because they are likely to have locked in some great rates compared to the ones mortgagees face this year.

For me it is this ‘fear’ story that needs to be put into context.

Mortgage-free

And let’s not forget that over 50% of owners aren’t affected at all because they haven’t got a mortgage. And even from a buyer’s perspective, it’s not all doom and gloom because according to Zoopla, one in two buyers have cash or loan to values of 50% or less of the property’s’ purchase price.

So, to ‘beat’ the headlines, we need to continue to reassure and not scare people that property is still affordable, even for first time buyers and for those who are nervous about future mortgage costs, they need to speak to a broker to find out how the new rates will impact their personal circumstances.