Press Round Up February 2022
The housing market has had the best start to the year in nearly two decades, according to Nationwide, with the average price of a home rising by nearly 1 per cent in January. Jeremy Leaf, principal of Jeremy Leaf & Co, told The Guardian that the survey ‘confirms what we have seen on the ground – a resilient market with prices still rising in response to improving but continuing low stock levels.’ He expanded on this in The Daily Telegraph, commenting that a rate rise would eventually slow down activity in the housing market. ’Looking forward, higher interest rates and inflation will inevitably have some impact on the pace of price increases and number of transactions,’ he said.
However, Halifax’s house price index wasn’t quite so bullish, suggesting that the rising cost of living will lead to a slowdown in house price growth. However, Jeremy Leaf told BBC News: ’Though price growth is slowing, these figures demonstrate the underlying strength of the market and how likely it is to withstand increasingly stretched affordability.'
Not only are house prices continuing to rise but mortgage rates are also edging upwards. Jeremy Leaf told The Evening Standard: ‘A rate increase seemed almost inevitable bearing in mind recent rises in inflation with more to come as energy prices in particular continue to cast their shadow. However, an immediate impact on housing activity at least is unlikely bearing in mind the number of homeowners on fixed-rate mortgages. Of more concern is the shock likely to be felt by aspiring first-time buyers who are so vital to the longer-term health of the market. Today’s uplift will probably be the first of a few and this future direction of travel for interest rates will inevitably compromise affordability for those who can least bear it, deter some from taking that first step on the ladder and dampen house price growth.'
Traditional wisdom says that spring and summer are the best times to sell your home, with the winter months proving to be notoriously quiet for estate agents. Jeremy Leaf told The Daily Mail: ’Traditionally, it is the spring, particularly around Easter, which is the better time to sell. Properties, particularly those with gardens and outside space, look better at that time of year.'
What can you do if you have sold a property but haven’t found a suitable one to buy - how do you protect the proceeds from inflation?. Jeremy Leaf told This is Money: ’This is a story we hear quite frequently. Clearly, a large proportion of people who wanted to move last year when trying to take advantage in particular of the stamp duty holiday and low interest rates were disappointed as competition for property was just too fierce. They had caught the moving bug but decided to put themselves in a better position to compete for the relatively few suitable properties becoming available in future. Some accepted what they perceived to be strong offers on existing properties and rented for at least six months… rising interest rates and inflation have stretched affordability to such an extent that many people just can’t pay as much as before.’