‘Time for optimism’ says property expert
Property expert predicts better times could be near, and advises buyers to be ready
Interest rates may have just risen yet again, but buyers who have been putting off their search should think about resuming the property hunt according to a London estate agent.
Fiona Lee is Sales and Lettings Director at Winkworth Ealing and Acton, and says better times could be around the corner.
The average 2-year fixed mortgage rate is currently 6.7%, up from 2.87% in the summer of 2022, and the steep rises have been pricing more and more buyers out of mortgages.
‘I know that when things are this bad, it’s quite easy to say, “It’s going to get better”. Frankly, how could it get worse? I’m not just saying, “It’s always darkest before the dawn” — I’ve been doing this for over 30 years, and I know when the signs of recovery are there. For a start, yes, the Bank of England has just increased the base rate to 5.25%, but that’s a less steep rise than we’re getting used to. The rises should not be slowing to a stop, and an eventual drop.’
Mortgage rates usually follow swap rates, and Lee points out that not only has inflation unexpectantly fallen to 7.9%, but two-year swap rates fell by 0.24% on 13 July 2023. The signs are there that the market is expecting a drop in interest rates.
‘It’s hard to put a timeframe on when things will return to what you’d call “normal”. As an estate agent, I’d love to tell buyers “The time is now”, but the truth is for many people it doesn’t make sense just yet. What I would say is that it could be a really good time to get the property search underway, if you haven’t already. There’s going to be a lot of pent-up demand for homes that gets released when interest rates start to drop. That’ll send prices up, and you’ll find the market gets competitive. Any preparation you can do now could give you a crucial head start.’
What about those who have a sale going through, and are under more pressure to find their next home?
‘Obviously, there’s no one-size-fits-all piece of advice that I can give. Some people might want to try and find a short-term rent while mortgage rates come down. It’s a lot of effort, but you might decide it makes sense. Purchase-wise, I’m not qualified to give financial advice, and I’m not a mortgage broker, so I can’t tell you how to approach it. I would point you to a broker to discuss the options, particularly the fixed-rate vs variable question.’
For those in W3, W5, W7 and W13 looking to know the true value of their property right now, Winkworth are offering a free market appraisal. You can book yours online, or by calling 020 8896 0123.
