Movers remain confident in sales but house price growth set to slow

Thinking of moving this year? You’re not alone. As borrowers’ confidence remains high, we take a look at the housing market, buyer behaviour and how recent interest rate rises may have an effect on house prices.

While we are seeing economic volatility around food and energy prices, it seems that homeowners are yet to be deterred from moving. Recent data from OnTheMarket has revealed that confidence in those looking to secure a mortgage remained very high in April[1]. Only 4% of movers were concerned about securing a mortgage to fund their property purchase – a slight increase on March’s figure of 3%.  

This confidence extended to sellers, 82% of whom in April were sure that they could complete a house sale within a three-month timeframe.

There was a reasonable lack of urgency when it came to securing a Mortgage In Principle (MIP), with nearly a quarter of movers (23%) on average across the UK not having secured an MIP in advance of their home search.

Regional differences

Those in the East of England and East Midlands experienced increases in seller confidence in April compared to March.

London experienced a slight decrease from March to April with 4% less sellers remaining confident they could complete their house sale in three months.

Buyer demand remains high

Despite the squeeze on the cost of living occurring in the UK currently, it seems that demand for homes is still strong. On average, 63% of houses listed in the UK were Sold Subject To Contract (SSTC) within the first 30 days of being put onto the market.

The regional picture is more varied, with 50% of London homes being SSTC within 30 days compared to 79% of properties in Scotland being sold in the same time frame.

What will happen to the housing market?

The strong consumer behaviour being seen within the house market doesn’t seem to be slowing down in the way it was first predicted it might after the end of last year’s stamp duty holiday.

However, some analysts are expecting that house price growth may slow to single figures by the end of this year[2]. That could be down to a combination of interest rate rises, the rising cost of living and supply increases in the market.

The Monetary Policy Committee (MPC) has predicted that inflation could reach or even exceed 10% by the end of the year. While some economists are predicting an overall slowdown of the economy by this time others, such as EY Item Club, have predicted GDP growth this year and next[2].

Remortgaging proving popular

What does seem certain is that with continued rising interest rates, homeowners remain keen to lock in their mortgage deal.

With the Bank Rate rising to 1% in May 2022, the fourth increase since December 2021, it appears that fixing a mortgage deal is providing some budget control to households in an otherwise somewhat uncontrollable economic situation.

In fact, 24% more remortgages were completed in April and 54% of borrowers locked in for a five-year fixed deal[3]. This reveals the extent to which homeowners are seeking stability when it comes to their mortgage products.

Remortgaging or moving home this year? B Mortgage Services can help. Get in touch today for a chat with one of our dedicated Advisers.

Brunsdon Financial is not responsible for the content of third-party websites. Your home may be repossessed if you do not keep up repayments on your mortgage.

Subscribe to our emails

Please enter a valid email address.
You need to agree with the terms to proceed

Share this

Movers remain confident in sales but house price growth set to slow

Thinking of moving this year? You’re not alone. As borrowers’ confidence remains high, we take a look at the housing market, buyer behaviour and how recent interest rate rises may have an effect on house prices.

While we are seeing economic volatility around food and energy prices, it seems that homeowners are yet to be deterred from moving. Recent data from OnTheMarket has revealed that confidence in those looking to secure a mortgage remained very high in April[1]. Only 4% of movers were concerned about securing a mortgage to fund their property purchase – a slight increase on March’s figure of 3%.  

This confidence extended to sellers, 82% of whom in April were sure that they could complete a house sale within a three-month timeframe.

There was a reasonable lack of urgency when it came to securing a Mortgage In Principle (MIP), with nearly a quarter of movers (23%) on average across the UK not having secured an MIP in advance of their home search.

Regional differences

Those in the East of England and East Midlands experienced increases in seller confidence in April compared to March.

London experienced a slight decrease from March to April with 4% less sellers remaining confident they could complete their house sale in three months.

Buyer demand remains high

Despite the squeeze on the cost of living occurring in the UK currently, it seems that demand for homes is still strong. On average, 63% of houses listed in the UK were Sold Subject To Contract (SSTC) within the first 30 days of being put onto the market.

The regional picture is more varied, with 50% of London homes being SSTC within 30 days compared to 79% of properties in Scotland being sold in the same time frame.

What will happen to the housing market?

The strong consumer behaviour being seen within the house market doesn’t seem to be slowing down in the way it was first predicted it might after the end of last year’s stamp duty holiday.

However, some analysts are expecting that house price growth may slow to single figures by the end of this year[2]. That could be down to a combination of interest rate rises, the rising cost of living and supply increases in the market.

The Monetary Policy Committee (MPC) has predicted that inflation could reach or even exceed 10% by the end of the year. While some economists are predicting an overall slowdown of the economy by this time others, such as EY Item Club, have predicted GDP growth this year and next[2].

Remortgaging proving popular

What does seem certain is that with continued rising interest rates, homeowners remain keen to lock in their mortgage deal.

With the Bank Rate rising to 1% in May 2022, the fourth increase since December 2021, it appears that fixing a mortgage deal is providing some budget control to households in an otherwise somewhat uncontrollable economic situation.

In fact, 24% more remortgages were completed in April and 54% of borrowers locked in for a five-year fixed deal[3]. This reveals the extent to which homeowners are seeking stability when it comes to their mortgage products.

Remortgaging or moving home this year? B Mortgage Services can help. Get in touch today for a chat with one of our dedicated Advisers.

Brunsdon Financial is not responsible for the content of third-party websites. Your home may be repossessed if you do not keep up repayments on your mortgage.