Amid headlines of falling house prices and volatility in the mortgage markets, what are would-be home movers to do? Crack on with plans or play a waiting game?

Here are our tips for buyers and sellers in the prime residential market to help make up your mind:

1. Supply and demand. As I write, we are seeing 34 per cent more buyers but -10 per cent less available stock in our prime markets compared to the pre-pandemic norm. There’s currently a market out there, with an underlying shortage of properties for sale. If you are thinking about selling, take advantage of the summer weather to have the photographs taken while the sun shines. Even if you decide to put them on ice, you’ll be ready to act quickly when the time comes.
2. An active market. According to TwentyCi, the level of £1m-£2m sales agreed between January and May in London this year was 85 per cent that of the same period in 2022, with 82 per cent for the rest of the UK, clearly demonstrating activity in the marketplace. Above £2m, transaction levels are robust as cash and equity become increasingly important market drivers.
3. Price expectations. Prime markets (broadly the top five to 10 per cent by value) are less exposed to the impact of interest rates than the mainstream due to the higher levels of equity and cash buying. Nevertheless, mortgage costs are still likely to mean sales will remain price sensitive over the coming months and into next year. Realistic pricing will be key.
4. Go for a broker. When it comes to mortgages we’d strongly recommend using an Independent Financial Adviser (IFA), who will help you access the widest possible range of options, and engaging with them as early in your decision-making process as possible. With the right mortgage structure, rates needn’t be as daunting as they might at first appear. Bear in mind you could secure a deal now and continue to review the market if rates come down. Our advice to buyers currently sitting on an advantageous mortgage offer would be to seize the moment. Further rate rises are expected.
5. Broadening horizons. With more pressure on the costs of mortgage debt, buyers looking for more space are likely to want to stretch their money further. One option could be to widen their search area. In the outer prime London market, for example, buyers can expect to gain 102 sq ft for every £100,000. In the prime suburbs this rises to 169 sq ft and by the time you reach the Midlands and the North, it has more than doubled to 361 sq ft.

Faced with uncertainty, it may be tempting to wait it out. The indications are, however, that mortgage rates are likely to stay higher for longer so a wait-and-see approach might not yield a significantly different result in a year or so’s time. For those keen to sell, acting now while demand outstrips supply could pay dividends. If in doubt, seek advice.

For more advice on the prime residential sales and lettings markets take a look at our recent webinar. 

Further information

Contact Andrew Perratt

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