It’s a brave person that predicts what happens next in the property market. Whether you are a lender, broker, agent, developer, legal company, surveyor, in removals, searches or the many other home moving services, from feedback I’m receiving, either nothing has changed and you are still rushed off your feet, or things are definitely slowing down and it may feel like the market could crash and burn at any point.

In the past, it wasn’t too difficult to forecast what was going to happen in property. Any uncertainty, talk of a recession and headlines about property crashes, would always cause the market to slow. However, since the pandemic, this relationship seems to have been broken and we won’t know for another year or so if this relationship will ever come back.

There are a lot of factors that aren’t just property related that could ‘spook’ the market.

The question is, does it really matter if we have a bit of a correction? Will it impact on the market like it has before and be devastating for everyone?

For me, even if property prices do fall back a bit, I can’t see it having the impact it has had on people in the past. One of the key reasons for this is the government’s changes in 2014 to the mortgage market. The number of interest only mortgages is low, the number of fixed rate mortgages is high. People aren’t borrowing 100 per cent or more of their properties’ value, in fact, their affordability has been assessed at the higher interest rates predicted. Then we have the 30 per cent of people that can buy with cash, who aren’t affected by mortgage rates, and finally we have landlords who are keen to expand their portfolios, but have held back due to the manic market. The huge shortage in rental stock is bound to get them back buying if there is a bargain or two to be had, all of which has to reduce the impact of a property market slowdown or fall.

Spooked market

But there are a lot of factors that aren’t just property related that could ‘spook’ the market. The Ukraine/Russian war, the energy crisis – even with the new cap – and how the finance markets will react to the new PM’s view on spending and borrowing. Oh and of course, new people in government looking after housing – but we are used to that changing annually!

If these factors all end up improving, it is likely the property market will just slowdown a bit, but if they worsen, then they could finally cause a drag on transactions and people’s confidence to move, which will impact on prices.

Some are already reporting this is happening with more down valuations and buyers saying they are getting deals accepted at low offers they thought would be rejected, so it’s clear some sellers are nervous the market might tank between now and Christmas and are choosing to take a deal when it’s offered.

But, even if prices do fall, they are likely to be minor versus the increases over the last few years. And, for those that have bought in the last 12 months and then they see prices fall back further, they are likely to have locked into cracking mortgage rates that will still make ownership viable. Especially when they consider the alternative – renting – and the tough time many tenants are having due to the lack of stock in this market and rents rising.

So, yes the market could go either way, but the reality is, if it does, it’s likely to be something out of our control that will cause the problem, and, if this happens, all we can do is make sure people don’t overstretch themselves and understand that buying is all about putting a decent roof over their head that’s theirs for the long term – five years or more. The alternative is staying at home with parents, continuing to rent or living in a home that’s not suitable for their needs anymore, and as long as they can still pay the mortgage, its still worth buying for the long term.

Real estate reality

The reality is, it’s not the market that should decide when’s the best time to buy or sell a home, it’s someone’s personal circumstance and if we can get this message out to everyone, especially if they are likely to stay there for a long time, then all that’s likely to happen is the market will slow down towards the end of the year and then continue to deliver a bit above or below the average 1.2 million home moves every year, keeping everyone in business, even if it’s not as busy as it has been over the last few years.