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An Insight into the Current Housing Market

An Insight into the Current Housing Market

02 October 2023

We know the housing market seems uncertain at the moment during the cost-of-living crisis and the soaring mortgage rates. Does this mean we are heading for a housing crash? This is currently uncertain with the average house price dropping by 5.3% in the year to August. What does this really mean?

Houses prices are going down, however they are still 20% higher than they were four years ago before the pandemic. The reason house prices are so high is due to multiple factors including a shortage of housing and the demand for properties. Another significant factor was the low interest rate meaning borrowing money was cheaper and mortgages were affordable, but that is no longer the case. The base rate has been increased multiple times since December 2021 and as a result the mortgage rates have shot up.

Even though house prices have fallen, the rising cost of borrowing has potentially cancelled out any benefit for the buyer.

Are we heading for a housing crash?

This is not a simple question to ask as we don’t know what the future holds, however with the rise of mortgage rates and the cost-of-living crisis this has sparked fears that the housing market might crash. Currently the demand for properties is still high across the board and mortgage rates are starting to fall, the high demand could help to avoid a potential housing crash.

The question on everyone’s mind, is now a good time to buy a property?

We spoke to One Call Mortgage Hub for their thoughts on the current housing state. Here’s what they had to say:

‘If you can afford to buy then, why not? This will get you on the property ladder which is a good thing. The rates could continue to rise, we just don’t know what will happen in the current economy. If the rates go down or up in the next two to five years at least you have already purchased your house and have started repaying the mortgage.’

What about re mortgaging?

‘I would advise to re mortgage as the fixed rate are lower than the current variable rates. Yes, the fixed rate is higher to what homeowners are used to but at least they are lower than the variable rate.’

When thinking about fixed rate, what should we go for?

‘It’s dependant on each client’s individual circumstances, if you fix in for 5 years, you’ll have the peace of mind that your interest rate will not increase in the next 5 years. Although, the benefit to our 2 year fixed rate is potentially the interest rates in 2 years time could reduce which will result in your mortgage payments reducing. Lenders have introduced 3 year fixed rate for clients who aren’t wanting to fix in for the full 5 years.

Interested to find out more about One Call Mortgage Hub? Why not look at their website to see how they could help you.

Written by: Amy Johnson

*Please note that the above information has been gathered through secondary research. The information provided is not based on our opinion. You should seek further guidance and information before making an informed decision.


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