This week in property
Oct 14, 2022
I’m still in shock from the huge interest rate rises we saw last week. Rates on residential two-year mortgages hit 6.46% on Wednesday and 6.32% for five-year rates – the highest since the financial crisis.
Property investors are now analysing deals at 7% interest and stress-testing at 8%. When will it stop? Nobody knows.
Let’s take a look at what the experts have been saying...
UK property values could fall by 20% after the government’s mini-budget last month led to a steep rise in borrowing costs for landlords, according to analysts at Goldman Sachs Group Inc.
According to an analysis conducted by Oxford Economics and reported by The Times, UK residential property is currently "overvalued by a third and likely to fall."
RICS chief economist Simon Rubinsohn said although house prices were still rising, "storm clouds" were gathering over both pricing and sales.
Whether you think it’s clickbait for cash-strapped consumer readers or the inevitable next step in the cyclical UK property market, one thing is for sure, everything is hanging in the balance until the fresh announcements from the government’s team on 31 October.
While the current outlook may worry many, the optimistic among us are pivoting to meet the opportunities that are still being presented with an ever-growing demand for rental properties and a growing choice of properties available for a reduced price on the market.
This week’s actionable tip: if you have agreed property purchases that have not yet exchanged, it’s time to renegotiate the price downwards. Use the rhetoric from the media and the expert opinions above to justify your reduced-price offer.