Cautious optimism: a welcome boost to confidence

General News   |   January 31, 2024   |   Lizzie


We have seen a significant uplift in the residential property market in our heartlands of Portsmouth and Southsea so far in 2024.

The turnaround has come about amid renewed stability of interest rates with lenders offering lower rates than predicted in the weak second half of 2023, so cutting borrowing costs for prospective buyers.

The New Year began with a surprise move by some mainstream banks and building societies to cut mortgage rates.

That’s a sign of cautious optimism, competitive pressure and hopefully the start of a progressive restoration of confidence.

While the long era of very low rates may have gone, we believe that, all going well, the pipeline of demand will continue through the rest of this year alongside the base rate remaining consistent or beginning to reduce.

Pent-up demand

If the Bank of England does indeed keep a lid on any more rises, or even cuts the rate as many economists expect, we should see the release of a substantial pent-up desire to buy, move, invest and let.

This is good news after the pressures on people’s budgets that characterised the market in 2023, chiefly inflation, the cost of living and higher mortgage payments.

As ever, people anticipating a house move, other property transaction such as buy-to-let (BTL) or looking to refinance or remortgage should ensure they have a robust plan and take well-researched advice from property experts.

On house prices and valuations, you have to go deeper than the national averages produced by the ONS or Nationwide to see the full picture.

A nuanced market

Markets are nuanced around regional economic conditions, property types, specific locations and many other factors. These all impact on price points.

Valuation surveyors don’t ‘speculate’ based on a national average. They base their judgements on robust and comparable market evidence.

Yes, some commentators continue to predict house price challenges in 2024, but with the prospect of stability returning and affordability pressures easing, we anticipate values and prices being in good health.

On BTL, new research from The Mortgage Lender gives grounds for optimism. It found that nationally more than half of residential BLT landlords (52%) added to their property portfolios last year in spite of market pressures.

And looking ahead to the coming 12 months, three quarters of respondents (74%) said they were confident about the state of the residential market.

Almost three in ten (26%) plan to add another single property to their roster, with the same proportion aiming to add multiple properties.

Vital spark

The right advice at the right time can help to safeguard you from risk and support you to navigate the inevitable fluctuations of a dynamic property sector.

We’re always here if you want to have a chat about the financial side of homebuying or selling.

Of course it takes time for improved market conditions to translate into completed sales. Previous market trends show that is true. But people will always need to buy homes.

Pent-up demand will be unleashed in line with more economic certainty. It’s the vital spark that ignites activity.

Most homeowners in Portsmouth and Southsea can be cheered that relative to their mortgages, the underlying value of their asset is still generally on the up.

For more information, we highlight a range of essential indicators about the local property scene on our website that you might find useful when you’re looking at mortgage options.

You can also stay up to date on trends in the property market by receiving our quarterly newsletter.


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