Property expert says right mindset crucial to getting deals over the line as new mortgage reality hits home

As mortgage rates continue to rise, adopting the right mindset and a willingness to compromise have become vital to getting deals done swiftly and successfully, writes Charlie Davidson, residential property expert with London law firm Bishop & Sewell LLP. 

With interest rates soaring at their fastest pace for nearly three decades, many people on both sides of property transactions are struggling to come to terms with the impact on the market. Charlie Davidson, Senior Associate with Bishop & Sewell’s Residential Property team, says that a disconnect between the mindsets of prospective sellers and buyers is often hindering the timely conclusion of deals, causing potentially costly delays. 

Charlie Davidson

Charlie said:

“The sudden surge in interest rates has affected the availability of cheap mortgages, causing both buyers and sellers to struggle to adapt to the ‘new normal’ of higher mortgage costs and how this affects not only their ability to finance any debt they incur buying the property, but ultimately the value of that property on the market. 

“Currently, buyers believe that they have the upper hand, operating in what they perceive to be a buyers’ market. 

“We’re currently seeing around 40% of properties in London transact at below their initial asking price, suggesting there is scope for deals to be done where both parties are willing to negotiate. 

“Meanwhile, sellers still believe market conditions are favourable to them and this misalignment creates a significant hurdle when finalising property transactions, often prolonging negotiations and delaying deals.  

“Adopting the right mindset is crucial to getting a deal done in the current climate.

“Ultimately, while they need to recoup value, sellers will also need to accept the constraints caused by higher interest rates, and price their homes accordingly if they are realistic about making a deal.

“With interest rates forecast to rise further, mortgages are only going to get more expensive in the short term, making any delays potentially costly should market conditions become still less favourable.” 

For more information about Bishop & Sewell’s residential property services, please contact Charlie Davidson in the firm’s Residential Property team: [email protected]  

Kindly shared by Bishop & Sewell

Main article photo courtesy of Pixabay