Despite being in the winter months, a notoriously quiet time for the property market, I find myself incredibly busy looking at homes in the area at the moment.
The off-market is busy than it has ever been with sellers struggling to find the homes they want to buy and therefore reluctance sets in, to openly market their own properties because they know they will sell straight away, leaving them in a high-pressured situation.
Looking at the market over the last few months in the Windermere and Ambleside area, according to Zoopla, we have seen a 0.9% rise in the prices in these areas, with Keswick prices also increasing over the last 3 months by 1.11%. So, despite this quiet period and lack of properties to the open market the prices paid are still increasing.
When you are dealing with your own home, the most valuable asset you will ever own, you don’t want to be in a situation where you are just buying for the sake of it or making huge compromises you will regret. Hence why I am so busy at the moment, helping to join the dots and assisting the whole chains in a whole range of circumstances.
When I analyse my transactions over the last year and look at the current climate, I can see these high prices continuing into the summer months due to the high demand and low supply of property.
We are in economically uncertain times and the reluctance to sell has arisen due to a wide range of external factors, wages, industry, covid, etc. And whilst sellers are achieving higher prices than previously, they are also buying at high prices. Their concerns when I speak to them are that they cannot find something to replace their home and this is causing the reluctance.
We also have the Bank of England increasing the base rate and the national living expenses are rising higher than ever before. It is inevitable that in the very near future mortgage rates will also rise, and once this starts to happen, we will see first time buyers struggling to purchase and this will have a knock-on effect on the whole chain. Once again, uncertainty will create lack of stock and I personally, cannot see the demand dropping any time soon for several reasons:
- People are far more flexible now with regards to work locations.
- People are wanting to live more rurally and find city life less appealing.
- People are increasingly wanting to retire and spend their money as opposed to saving it.
- We have all spent a lot of time in our homes courtesy of Covid19 Lockdowns, and this has led to some people wanting to move home and change their surroundings.
- Extra space is needed for home working as this trend has grown via necessity and choice.
- Buyers have managed to save money due to the pandemic meaning there is spare income to move house.
- Mortgage rates are at an all time low and due to increase meaning some buyers want to make a move before these go back to their traditional levels.
We have been incredibly lucky to have had low mortgage rates for such a long time. It will be a shock to the system once these rates go up, and complacency has crept in, that with the increase in the cost of living, many are choosing to try and secure a property now rather than wait it out and see what happens. Believe it or not, at one stage mortgage rates used to be as high as 17% in 1982
Nothing in the property market ever happens quickly unless it’s to do with Stamp Duty changing, so my personal predication is that things will carry on just as they are, well into the summer next year. Once we get to the other side of summer, it is not so clear where we will then.
As I have always said The Lake District property market is fairly strong and resilient compared to the rest of the UK because of its unique offering and desirability. Small changes can be seen, but maybe not the huge price changes that potentially the rest of the UK will see in the years to come.
The only caveat is in relation to anybody who has paid hugely over and above what they should have done, due to a best and final situation. We have seen many of these instances over the last eighteen months, and if you have overpaid then reselling after summer next year may very well cause you issues, depending again on what happens elsewhere. However, long term purchases will stand you in better stead in this situation I feel.
Areas just outside of The National Park that were once not so popular and have previously held a lower for sale price, have started to see an increase in footfall over the last year due to the reasons listed above. These usually tend to be smaller clusters of houses or villages with little amenities on the outskirts of The National Park. I am personally seeing the desire to live in these areas increasing and the prices in turn are rising in response to that, however these are the types of places in the future where the effect of property market changes and financial factors will be felt more.
The holiday let industry is also expecting yet another bumper year, as many of us at this time of year consider booking our holidays. Many have visited the area that they never knew it existed prior to 2020 and will have now also fallen in love with The Lakes. Bring into those the current travel restrictions to places like France and we are bound to then see a boom in the level of UK holiday bookings once again this year. Investment wise holidays lets should be in for another good year from Spring to Christmas 22.
I will be keeping a close eye on the Land Registry as the last twelve months’ worth of figures will have recently been published and we will be able see the level of offers that were accepted on many of the local homes in the area. Watch this space!
Have a great New Year.