Financially fabulous
The cost of living crisis is forcing us to look at our finances in a new light. As our homes are usually the most valuable asset we hold, we asked the experts for advice on how to make the most of them and their predictions for the future
Is now a good time to BUY or SELL?
This will depend, to some extent, on your personal circumstances. However, if you do decide to buy a property at the moment, don’t expect to see the dramatic increase in value that many homeowners experienced during the pandemic, when house prices rose at the fastest rate in 15 years and annual house price growth hit 10%.
Most experts expect this to slow in the foreseeable future and buyer demand to ease off. Research by the Royal Institution of Chartered Surveyors suggests that house prices will not rise as quickly in 2023 as they have done over the past two years and some experts, such as the economic research consultancy Capital Economics, are even predicting that prices will fall by 5% by the end of 2024.
Lucian Cook, a director of research at Savills, says, ‘Interest rates have gone up and we would expect the housing market to slow from here. The rising cost of living and slightly higher costs of mortgage debt are going to weigh on the market a little bit more over the remainder of this year.’
The market is still being affected by changes due to Covid, too. Many city dwellers who found themselves working from home decided they wanted bigger homes in rural locations. This so-called ‘race for space’ means there is still a shortage of housing stock. ‘The number of properties available to buy has been depleted by the level of activity that we’ve seen,’ says Lucian. As a result, it’s a seller’s market and could stay that way for a while, he says. ‘Savills is predicting that house prices will fall by 1% next year, followed by low single-digit growth for the next three years. There aren’t any indications that suddenly a lot of housing stock is going to hit the market to drive prices down.’
With many casting their net further afield, certain locations are likely to experience more significant price rises than others. ‘The biggest price growth we’ll see is in regions such as Yorkshire and the Humber and the North West,’ says Lucian. ‘Places in attractive North Yorkshire areas, such as Ryedale, have seen some strong levels of activity and price growth.’ Properties in other ‘lifestyle relocation markets’, such as South Hams in Devon or Monmouthshire in Wales are also selling well, he says, while London flats have been more difficult to shift.
Since it is a seller’s market, before you make an offer on a property, Lucian recommends you put yourself in the best possible position. ‘You need to
