Is NOW the time to buy property in Basingstoke?



photo kindly given permission from www.soderberg.photography

There are two interesting trends in the market that have come together at the same time, which make me wonder if now is not the right time to start investing in more property again.

Low Mortgage Rates

Firstly, the steady decline in mortgage rates over the last nine years has seen the average new lending rate fall from a peak of more than six per cent in 2008, to today’s 2.2 per cent, according to the Council of Mortgage Lenders (CML). As a result, and in spite of steadily rising house prices, mortgage interest costs as a percentage of income have been falling for the majority of homebuyers.

In recent weeks, we have seen many mortgage products coming to the market at rates between 1.14% and 4.4% depending on the size of deposit that the purchaser can put down, and the size of “arrangement” fee imposed by the mortgage company. The arrangement fees can range anywhere from as low as £0, to as much as £1,750 depending on the mortgage provider and the size of deposit.

Average House Prices in Decline

Secondly, according to the Nationwide House Price Index, prices fell nationally for the second month in a row. House prices across the UK fell by 0.4 per cent in April, challenging earlier forecasts made expecting the return of growth. The fall is also the worst monthly decline since 2012 with the average price of a UK home falling to £207,699 according to Nationwide.

 

 

This decline is based on two major factors… A lack of available stock on the market to purchase, despite the low rates of interest, and as mentioned in our previous blog, the General Election is also playing its part, and is likely to slow the market until the results are in after the June election.

 

Estate Agents have reported that the average number of properties available for sale per agent is down 28% on the sale time 12 months ago, but the number of buyers searching for property has only declined by 5% over the same period.

Martin & Co Comment

The property market is by no means in crisis, but for it to start hitting its stride again, there needs to be a significant increase in the available stock in the market. However, between now and the general election, there is an opportunity for motivated sellers and buyers in a position to purchase, to take advantage of low mortgage rates and temporarily lower prices.

 

In Basingstoke, even though there have been reductions in prices at the higher end of the market, demand for property in the right area and at the right price has not waned. In a recent sale we were involved with, we received 10 offers for a property, and the sale was finally agreed at an amount exceeding the original asking price.

 

It is still our belief that property prices in the Basingstoke area will increase over the course of 2017, although this may be a more modest increase than previously thought, and should be around 4% growth.