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We’re in the water: UK housing craze shows no signs of slowing | housing market

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It took less than a week to sell a two-bedroom garden apartment in north London for a guide price of $950,000. Located in a mixed area outside Islington and Camden, these apartments feature a spacious patio, garden, oak flooring and underfloor heating.

It’s full of people wanting to see it, says Andrew Groocock, local partner for real estate agent Knight Frank, who helped make 23 visits. It checks exactly what is hot in the current market. It’s still an incredibly lively market. The past two years are noteworthy.

UK inflation is at 9%, its highest in 40 years, the cost of living crisis is exacerbating as food and energy prices soar while real wages fall while UK interest rates are rising, but the housing market remains buoyant. The rise in house prices may have peaked, but the race for space that began during the COVID-19 pandemic continues. Many are embracing hybrid work and spending more time at home, driving demand for larger properties with gardens.

Andrew Perratt, national head of competing real estate broker Savills, said the commuting zone has expanded as commuting belts around big cities remain real estate hotspots and people who don’t need to be in the office every day are ready to travel further.

UK average house price chart

Real estate agents say that because many properties sell out within a week or two, demand far outstrips supply and it takes longer for new sellers to bring homes to market. Agents promote themselves to sellers by sending personal letters containing photos of their children and pets who will become buyers, talking about bidding wars and in a desperate effort to secure a purchase.

Lucy Joerin, co-managing director of Oxfordshire-based Stowhill Estates, said large-family homes that took six to nine months to sell before the pandemic now sell in two to three weeks, and one within four days of launch. said.

It’s not always the highest offer, she says. Many buyers are writing their resumes as if they were tossing them at the seller. What is important is that the family participates in village life. She recalls two recently successful buyers doing a lifestyle promotion in which they sent letters to their families with photos and promises that their kids would attend a local school.

The housing market is still thriving in cities like Oxford. PHOTOGRAPH BY ROBERT STEINFOSS/ALAMI

Jeremy Leaf, a real estate agent in North London, says that 30 years ago, when he wanted to buy a particular apartment, he put a personal note on his door. Why not? he says Do whatever you can to get real estate. This is especially true when supplies are tight and a specific road or catchment area is desired.

Groocock said the selling price of several large-family homes on a market between 1.2m and 2m in Dulwich, a wealthy district in South London, is well above Guide prices.

In two of them, a three-bedroom home priced at 1.5m received 47 views and 23 offers, and a five-bedroom home on the market at 2m received 46 and 29 offers. Some engage in closed bidding in which all bidders simultaneously submit offers to agents without knowing that their competitors are ready to pay.

About 40% of the properties that Knight Frank sells across London are currently for sale, which is unusual. For the first time since the COVID-19 pandemic, buyers from the Middle East are returning to their reserved numbers for the next two weeks to see modern apartments in Kensington and Notting Hill.

The frenzy can be brief. While some fear the housing market could free fall as the Bank of England (BoE) struggles to contain inflation, as the cost of living crisis deepens and interest rates rise, others believe a collapse can be avoided.

There are more jobs and vacancies than the unemployed, according to this week’s labor market data, which will give people more confidence in terms of repayment, says Leaf.

house price vs income chart

Tenants who face three hurdles of soaring rent, energy and food costs will face even more. According to real estate website Rightmove, monthly rents are 40% higher than they were a decade ago, and tenants are fully feeling the impact of rising costs, and costs are rising at the fastest rate ever.

People who can afford their own homes have better lives. The Bank of England began raising its key interest rate in December, rising from 0.1% level to 1% this month for the first time in three years, and although more increases are expected, mortgage loans are still cheap by historical standards. speak.

The pace of the housing recession will depend on how aggressively the Bank of England raises borrowing costs, Reef says. Adjustments are unlikely this time around, as lower interest rates make debt relatively easier to manage. Of course, it is still very difficult for some people amid the cost of living crisis.

Tenants are struggling, but those who can afford their own homes have a better life. Photo: Mogyui/PA

Jonathan Harris, Managing Director of Mortgage Broker Forensic Property Finance, said: You will see steady rate hikes, not massive increases.

According to trading agency UK Finance, three-quarters of borrowers are using fixed-rate mortgages, and many people’s monthly payments are still unaffected. People looking to buy are generally eager to have their mortgages repaired in five years, while they are more interested in having their mortgages repaired in seven to ten years, the broker says.

L&C Mortgages’ David Hollingworth said fixed rates have been the product of choice for some time. People can fix their mortgages at a similar rate of less than 2.5% over 5 or 10 years. Things are volatile and lenders advertise and raise interest rates every week.

But Leaf says the outlook is better than in 2008, when the market crashed and some properties lost 50% of their value. Payback, interest rates are very low, and even those who suffer are hoping they won’t be foreclosed and into huge debt, as some have done before. It’s different from last time.

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2/ https://www.theguardian.com/business/2022/may/21/uk-housing-market-homes-sell-inflation

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