Crisis. Turmoil. Unprecedented.
These were words rarely used pre-pandemic.
Now they’ve become staples of our nation’s news coverage.
And this week, they have been used more than ever to report on the economic waves caused by the Chancellor’s mini-budget last week.
As an agency that believes in always telling the truth, it would be highly disingenuous of us to say it’s business as usual.
It’s not.
With interest rates rising and mortgage rates following suit, local home buyers and sellers are concerned.
We’ve spoken with many people currently buying and selling their homes over the past few days. And our advice to them has been simple.
Historically, the property markets have had significant ups and downs over the decades. BUT – if you look at it in ten-year cycles, property prices always increase.
Media predictions of a property market crash are just that – predictions, or to seek a dictionary definition: an act of saying what might happen in the future.
In June 2016 – after the Brexit referendum, it was predicted that property prices would plummet by up to 33%. They didn’t.
During the years of protracted Brexit negotiations, it was predicted that property values would sink by 25%. They never.
And when the pandemic hit in March 2020, it was predicted that the housing market would come to a juddering halt for years. Instead, it stopped for a couple of months before seeing record price increases.
Of course, no one knows for sure, but some things do seem certain to happen.
It’s highly likely it will become harder to sell or buy a home over the next three to six months.
Harder, but not impossible.
Why?
Because when you choose an agent based on their expertise, support, marketing and negotiating skill and ability, rather than a cut-price fee and fingers-crossed approach, you give yourself the best possible chance of success.
And some people already with a sale or purchase in progress may be getting nervous.
This is totally understandable.
But it’s worth considering this.
If you agreed on a sale and onward purchase two to three months ago, you are in what’s called ‘a relative market’.
This means that the price you agreed then is relative to what the market was doing then.
You may not feel like you’ve gained something, but you certainly haven’t lost something.
And for first-time buyers thinking of pulling out of a deal in motion and returning to the market in, say, 6 – 12 months, remember, it’s a big gamble.
These questions need to be asked.
Will you get as good a mortgage deal in 12 months? (You won’t.)
What if prices remain the same?
What if they increase? (Think back to Brexit and Covid-19 property predictions.)
Have you factored rental costs into your decision? Is it better to start paying off your own mortgage now or continue paying off someone else’s?
The big picture
According to industry data, most people stay in their homes for 12 – 20 years.
So, it’s highly likely that your property will be significantly more valuable in the future if you buy it now, even with all the news swirling around the housing market.
And let’s not forget the lessons lockdown taught many of us.
That life is for living and not something we can put on hold.
If you want a new property or seek somewhere else to call home, start thinking five to ten years down the line from now.
Remember, a home is much, much more than a financial asset.
It’s the place your children grow up.
Where you enjoy your sunset years.
Where you grow the relationships that really matter.
Where you make memories that last a lifetime – not just an economic cycle.
At Martin & Co, we’re here for home movers in Chelmsford now, more than ever.
Copyright 2022 Martin & Co
