According to Zoopla’s House Price Index, the housing market is showing signs of a slowdown. If you are looking to sell your home, now is a good time to do so!
Zoopla’s House Price Index shows that house prices have broadly remained the same since last month, showing early signs of a slowdown, considering house prices have continued to increase every month since December 2019.
Inflation has also pushed The Bank of England’s Interest rate to 1.25%, causing banks to increase their interest rates for new mortgage products and existing tracker & standard variable mortgages.
Although the cost of borrowing has increased, buyer demand is still up 40% on a five-year average but showing early signs of a decline. The Bank of England’s Interest rate is expected to see another rise before the end of the year, as the government looks to slow the increase in inflation by pushing people to save more and spend less.
Zoopla’s price index shows that property prices have technically remained unchanged, with a low increase of just 0.1% since May showing early signs of a slowdown. This is the lowest growth rate since December 2019 and the lowest quarterly growth rate since March 2021, at an increase of 1.4%. Annual price rises have also slowed to an increase of 8.4%, down from 9.2% in April.
With signs of the property market declining to more normal conditions once seen prior to the pandemic, sellers who are looking to sell their property should act sooner than later.
Although property prices are not expected to decrease, the current 40% buyer demand is expected to become lower. If you are looking to sell once buyer demand has decreased, you may have to negotiate on your selling price, and your property may take longer to sell in comparison to now.
We are seeing properties sell fast at the asking price, with some selling well above the asking price due to the current demand.
Although the property market is seeing new sales agreed at 21% above the five-year average, the overall market is also showing an average of 9% price reduction on properties sold in May, averaging a £22,500 discount.
That being said, Leicester is still seeing an 8.9% increase in property prices!
As the cost of living continues to increase, mortgage rates are rising as the Bank of England continues to raise interest rates to control inflation.
The average interest rate now stands at 3.37% for a five-year fixed rate based on a £250,00 mortgage with a 25% deposit, compared with 2.64% in December 2021. What may seem like a slight increase in percentage equates to an additional £870 per annum on the mortgage, which may cause stress on monthly budgets with the overall rise in costs such as food, utility bills and petrol.
Overall, house prices are expected to remain strong. Although the market is starting to slow down, demand levels are still higher than the five-year average. Properties are still selling fast, with many deals being done even before the property comes to market.
However, with signs that the market is about to slow down, it is certainly the best time to sell if you want to do so. Market experts expect the Bank of England to continue to increase interest rates to tackle inflation, and with the continued cost of living going up, the high demands that we have seen over the last couple of years will start to tapper off to normality.
Although property prices are not expected to come down, people will likely try and negotiate a lower price, as seen over the last two months.
If you are thinking of selling your property, now is a great time. Speak with our dedicated team by calling us on 0116 275 8888.
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