Introduction

The property market in the UK is going through some important changes. One key factor is interest rates set by the Bank of England. The Bank of England’s nine-strong monetary policy committee (MPC) recently voted to hold the base rate at 5.25%. Something industry experts are calling the strategy ‘Higher for longer’ with the basic idea being to keep things stable. This is happening as the UK government works to reduce inflation, aiming to half it by the end of the year.

Fred Jones, COO of instant buying firm UPSTIX, has said that the MPC’s strategy will mean that “falling prices and low demand” will continue to challenge sellers looking to shift their property. House prices have risen month on month in October by 0.9%, according to property portal Rightmove, but they still remain down 3.3% when compared to the same period last year. The Government’s national statistics on property transactions also show a drop of 19% for September when compared to last year.

Changing Property Market and Interest Rates

Although interest rates haven’t risen, the threat of rising rates still lingers. The nine strong MPC’s vote was split 6-3. The 3 external MPC members voted to raise rates again to 5.5%. When base interest rates are higher, it means that getting a mortgage becomes more expensive because the interest you have to pay on the loan also goes up, making it harder for people to afford a home.

Nationwide’s Chief Economist, Robert Gardner points to the number of mortgages being approved as an indicator that the strength of the current market activity is currently “extremely weak.” Only 43,300 mortgages were approved for house purchases in September which is 30% below the monthly average prevailing in 2019.

The government scheme aimed at turning ‘generation rent’ into generation buy’ by supporting banks and building societies to offer 95% loans is failing most single first-time buyers on an average salary, according to a Rightmove analysis. The mortgage guarantee scheme falls short for many, leaving them locked out of the property market and struggling to afford the homes.

Changing Strategy

In this fiercely competitive market, sellers and estate agents are compelled to work not just harder but much smarter. It’s essential to recognize that there’s no one-size-fits-all solution. Different properties and circumstances demand diverse approaches. This calls for sellers and agents to assess a wider array of options when selling property. In a market in flux, adaptation and providing various choices become the keys to success.

In todays dynamic and evolving property market, it’s evident that sellers and estate agents must embrace adaptability and diverse approaches. We’ve written previously on realistic pricing being key but the auction method, offers a distinct strategic advantage in challenging times. Auctions offers an incomparably transparent, fast, and secure process. With interest rates and market dynamics in constant flux, the auction method offers a reliable path for sellers. In a world of change, choosing the auction method becomes a testament to our motto: “Simple, Safe, Secure.”

Learn more about our Auction Methods here: “Explained: The Methods of Auction“