housing market still buoyant as prices rise

The start of the year is generally one of the quieter periods for the housing market and yet that hasn’t been the case so far. The Bank of England reports that around 74,000 mortgage approvals were made to home buyers in January, the highest total since July last year when 75,900 approvals were recorded.

Consumer confidence, in terms of people looking to transact, is reflected in what we are seeing, as MT Finance enjoyed its best ever month in our 14-year history. February has followed a similar trend, with a huge amount of positivity among buyers. Although many took advantage of the stamp duty holiday and made their move over the past 18 months, there are plenty who still wish to purchase a new home but are being thwarted by lack of stock. The lack of supply of quality and suitable homes in desired locations is fuelling the frenzy with many sellers having multiple offers on their homes, with prices going above the asking price.

This time last year, buyers had the stamp duty holiday to spur them on; now there are fewer sellers brave enough to put their properties on the market as they are fearful that they will not be able to buy themselves. Subsequently, many are selling up and moving into rented accommodation in order to put themselves in the strongest position by being cash buyers, which in turn is also pushing up rents.

asking prices continue to rise

With Rightmove reporting that asking prices continue to rise by 2.3 per cent in February, the biggest monthly jump in pounds recorded in more than 20 years, the housing market is showing few signs of calming down. The rush to buy a home which has been so prevalent since the pandemic started is by no means over, with buyers still looking to take advantage of the low interest rate environment before affordability becomes too much of an issue.

With space at a premium, working environments having changed, and with many people now working from home a few days a week, what money people are saving on travel can now be put towards mortgage payments. But one of the issues, as property prices continue to rise, is that there is a danger that affordability is stretching beyond the means of many would-be buyers.

It will be interesting to see what happens over the coming couple of months with regard to purchases, as further base rate rises are possible, and with the bigger lenders starting to raise their mortgage rates, borrowing costs are edging up across the board. Rather than put buyers off, this may result in them clamouring to get deals done sooner rather than later, focusing minds on low rates while they are still available. This could mean we see a continuation of the positive start to the year with plenty of activity still to come in the market.

how we can help

At MT Finance, we can approve a bridging loan to purchase an investment property within hours, lending from £50,000 up to £10m at up to 70 per cent loan-to-value, useful for those who want to turn themselves into cash buyers and move quickly. Please get in touch for more information by filling out our quick enquiry form, emailing or calling us on 02030512331.

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