Is the UK property market becoming an exciting one for buyers?

According to Zoopla, sellers are accepting discounts of £14,000 on their asking price as the average estate agent has 79% more available properties than last year

David Hannah, Group Chairman at Cornerstone Tax,
discusses why the property market is becoming more attractive for buyers 
 
Sellers who are accepting discounts on their asking price are selling their properties with an average reduction of £14,000 or 4% according to Zoopla. The data also shows that demand from house hunters is 43% lower than a year ago with buyers having more choice of available properties with the average estate agent having 25 homes available, compared to 14 a year ago. Group Chairman of property tax experts, Cornerstone Tax, David Hannah, states that the market is showing signs of being a buyer-friendly environment and opportunities are there for individuals who are ready to take them.

Adding to this, significantly more supply could be added to the property market soon as Hamptons shows that nearly half a million landlords are expected to sell their properties within the next five years as the baby boomer generation retires. The average age of a buy-to-let landlord now stands at 60 years old and the expected wave of retirees cashing out is forecast to push sales of buy-to-let properties to a new peak in the coming years – providing more opportunities for homebuyers.

Hannah states that the UK property market is going through a re-adjustment period and is slowly adapting to the new rates of mortgages. However, we are already beginning to see a fall in fixed rate mortgages, which has resulted in a wave of buyers returning to the property market. In October 2022, average fixed mortgage rates peaked at 6.65% for a five-year fix and 6.52% for a two-year fix. According to Moneyfacts, five-year fixed-rate deals are now at an average of 5.04%, which is causing a renewed degree of optimism in the market for prospective buyers.
 
Further positive findings from the RICS report show that prices are expected to fall in coming months before levelling out in London in 12 months, which will be a welcomed relief for many in the capital where the average property price is £731,895 according to Zoopla compared to the national average of £290,000 reported by GOV. However, further doom and gloom is expected for the UK’s rental market with a lack of properties to let and a rising number of tenants. Rents are expected to increase by 4% in the next year. 
 
David Hannah, Group Chairman of Cornerstone Tax, explains:
 
“I think if you look at the current state of the property market, it can be classed as a buyer’s environment. We have seen continuous demand over the past few years for properties which has caused an increase in prices, and we have witnessed bidding wars for available homes. 
 
“However, rising mortgage rates combined with the increase of supply in the property market has led to demand cooling and that means sellers are having to be more flexible in terms of asking prices. There is also a growing number of landlords that are selling their prices which is assisting in providing stock and making the market a more enticing one for buyers.

“There are now real opportunities for those ready to take them. We are in a situation where sellers must be more realistic about their asking price and be prepared to take a figure significantly lower than what they are currently asking. With the buy-to-let market becoming increasingly less-desirable and a substantial number of landlords coming up to retirement, more properties will enter the market. This means that buyers will have more options and if a seller refuses to accept a price, they will have the luxury to look elsewhere – the pressure is very much on the sellers.”

Kindly shared by Cornerstone Tax

Main article photo courtesy of Pixabay