Tue 13 Sep 2022
A slowdown in the housing market has already begun even though house price data suggests otherwise. Jeremy Leaf, principal of Jeremy Leaf & Co, told Mail Online: ’The only surprise in these figures is why it is taking so long for the slowdown we have noticed in our offices over the past few months to be reflected in the numbers. But don’t get me wrong – we are seeing a reduction in growth, not a major correction as prices continue to be supported by lack of choice and a strong labour market. However, still-rising interest rates and cost-of-living pressures are likely to have an increasing impact in the next few months.'
Sales of homes continue to fall, RICS survey data suggests. Jeremy Leaf told The Evening Standard: ’We are finding at the sharp end that the desire to move is outweighing worries about continuing increases in interest rates and the cost of living. On the other hand, those concerns are disproportionately affecting lower income households which is compromising the bottom of some chains, resulting in fewer and lengthier transactions.'
More homes were sold in the UK in July than in any other month this year, according to HM Revenue & Customs. However,. Jeremy Leaf told BBC News: ‘Concerns about the rising cost of living and interest rates are prompting a more cautious approach from buyers, meaning sales were taking longer than previously.’ He explained further in The Daily Telegraph: ‘The market has moved on. Demand is still there but concerns about the rising cost of living and interest rate are prompting a more cautious approach.'
Mortgage lending fell to £5.1 billion in July from £5.3bn in June, while the real cost of new mortgages are at their highest level since 2016. Jeremy Leaf told The Evening Standard: ’Mortgage approvals generally prove to be a very useful lead indicator of future housing market activity. As a result, these latest numbers are probably being watched more closely than usual for signs of any significant changes in response to recent sharp increases in inflation and energy prices in particular.'
Prospective homebuyers are increasingly considering how energy efficient a property is. Jeremy Leaf told The I: ‘If you are buying a draughty old cottage in the middle of nowhere, the insulation properties of that property are incredibly important. This may be less of an issue in a block of flats in London. Look at windows, doors and the loft to check how insulated they are. Look at energy bills for the property and check in particular for any sharp changes in units used over time, rather than just the last bill.'