The Property Market

We hear from local mortgage advisors, solicitors and more to find out what’s happening with the current housing market and what you can do to make your home more appealing to potential buyers.

On the 2nd of February 2023 (after this was written), the Bank of England are changing mortgage rates again which could see them go up or down.

It’s no secret that the housing market in 2022 was rocky to say the least, but what’s in store for 2023? Let’s see what our brilliant local businesses in the property industry have to say…

Kitsons Solicitors

1. What is currently happening in the housing market, are people still buying and selling?
The housing market has not yet experienced a large drop in momentum, with estate agents reporting that new instructions are high, and buyers still need to be quick off the mark to secure a property. Whilst there has been a small decrease in house prices, due to the higher level of interest rates on mortgages, there is still high demand.

2. In your opinion is this still a good time to buy a home?
In my opinion, it is still a good time to buy a home. It is important, however, to weigh up your own personal circumstances at length before deciding if now is a good time to make the move. If you are a First Time Buyer, you may wish to hold fire in the hope of securing a more attractive mortgage rate. However, if you are looking to move and sell your current property, you may wish to make the most of the recent boom in house prices.

3. How long on average will the Conveyancing process take when buying a property?
Buying a house is likely to be your most expensive purchase. Therefore, it is not out of the ordinarily for this to take a little time. On average, the current conveyancing transaction in the Plymouth area is taking in the region of 10-12 weeks from instruction to completion. It is important to note that there are a number of outside factors that may impact this timescale.

Matthew Bryant from Kitsons

1. What is currently happening in the housing market, are people still buying and selling?
At Kitsons we continue to experience strong demands for our residential conveyancing services. Volumes of property sales and purchases have been unusually high for the past two or three years, starting before the Pandemic in 2020 and continuing through the lockdowns, largely as a result of the Stamp Duty Land Tax holiday, and since then as people have tried to make up for lost time. We did see a slight drop in new instructions in December 2022 but, given that house buying is not at the top of everyone’s priority list in the run up to Christmas, this is quite normal. However since then we are seeing a consistent level of new instructions in January but it is a bit too early to tell at this stage whether the general demand for housing is cooling off.

It is accepted that when demand for housing outstrips supply prices are driven up as buyers compete for fewer properties and this is the trend that we have seen in recent years. This is the result of many factors including labour shortages in the housebuilding industry, increased material and energy costs due to supply shortages and inflation, general economic uncertainty, the Covid pandemic and more recently the breakout of war in Europe.

According to Government statistics the average house price in the UK, as at November 2022, was £294,910 which marks a 3% drop in house prices compared the previous month but a 10.3% increase compared to the previous year. Compare this to the rate of inflation and the Consumer Price Index rose by 9.3% in the 12 months to November. A report in the Guardian in December 2022 says that according to Nationwide UK house prices fell for the fourth month in a row which is the longest run since 2008 and house price growth slowed in all UK regions particularly the south west England where the annual rate fell from 12.5% to 4.3% in the last quarter. This is perhaps to be expected given the current high rates of inflation fuelled by energy price inflation and supply issues. As long as demand exceeds supply house price inflation will continue but possibly not at the same level as in recent years.

2. In your opinion Is this still a good time buy a home?
Due to historical housing supply shortages there is still a residual demand for housing as housebuilders struggle to reach the levels of new homes completed prior to the 2008 crash. There has been a steady increase in house completions since then but not surprisingly the 2020 Pandemic created a considerable downturn before the industry bounced back in 2021. According to Government figures in the year to 30 September 2022 there were 181,000 new build dwelling starts in England which was 1% higher than the previous 12 months. However this is well short of the ambitious target set by the Government in 2017 of increasing the housing stock by 300,000 units a year in England.

We all need somewhere to live and owning your own home can often provide certainty, stability and freedom for the future. Affordability is the key. Mortgage rates have increased dramatically in the past 12-18 months but before that they were at historic lows for several years. Prior to 2008 mortgage rates in excess of 5% were commonplace and it could be said that the mortgage lending rates are now back to normal. Whilst there are rumours of a possible drop in mortgage lending rates there are many other expenses to consider when buying a home. Anyone thinking of buying for the first time should do their sums carefully and make sure that they are not overstretching themselves financially. Provided that a prospective buyer sees that a house purchase is a long-term investment there is never really a bad time to buy a home.

3. How long on average will the Conveyancing process take when buying a property?
At Kitsons we generally estimate between 6 and 8 weeks to sell or purchase a residential property. However there are many variables to take in to consideration including mortgage finance; whether the property is freehold or leasehold (a leasehold purchase generally takes a little longer); the speed and expertise of the conveyancers acting for both buyer and seller; and the size of the chain involved (how many other sales and purchases are linked to yours). A cash purchase (i.e. no mortgage) of a freehold property where the seller is not relying on the proceeds of sale to buy another property will probably take considerably less time than a leasehold purchase with mortgage funding which is relying on a series of other leasehold sales. The best way to ensure your sale or purchase goes as smoothly and quickly as possible is to instruct a reputable firm of solicitors to help you with your conveyance and hope that the person you are buying or selling from does the same!

Curwins Financial & Mortgage Advisors
– Paul Stokes –

1. Are there any cuts on stamp duty or government offers available?
There were some changes introduced last year: There is currently no Stamp Duty Land Tax (SDLT) payable on residential properties under £250,000. For first time buyers that increases to £425,000. That’s providing that if after buying a property, it will be the only property you own. However, you usually pay 3% on top of the residential property rates if you own another residential property and are buying another home or buy to let property. The GOV.UK website has more detail and a calculator for anyone that wants to work this out themselves.

2. Have Mortgage rates dropped and what is the average lender mortgage rate?
We’ve seen most lenders’ fixed rates continue to drop over the last month or two after a rapid period of increases throughout 2022. Currently 2-year fixed rates are available from around 4.65% and 5 year fixed rates from 4.35% but it’s worth noting that these are changing all the time as lenders adjust their products.

However variable rate mortgages and those that track the Bank of England base rate have increased because the Bank of England have increased their rate from 0.25% in 2022 to 3.5% at the time of writing. It is being widely predicted that this will be increased to over 4% this year as the bank continues to target reducing inflation.

3. In your opinion do you think mortgage rates will stable this year or increase?
Personally, I feel that fixed rates are likely to continue to drop, albeit slowly throughout 2023. In the short term we’ll also have to see what the Bank of England decide when they next review the base rate in February. Whilst fixed mortgage rates could continue to reduce I think variable rates are likely to increase in the short term as the Bank of England wrestles with reducing inflation. Once the bank feels that inflation is dropping or is coming under control then it may be able to stop increases and eventually consider reducing the base rate.

“The home-buying process can be complex for the first-time buyer (FTB). So much so that finding the right home can start to seem like the least of your concerns”

“Here are some top tips to prepare financially before you kick off your search:

1. Know what you need. Before you start searching, make sure you separate the essential stuff from the nice-to-have extras
2. Check your credit score. This will be essential during the pre-approval stages
3. Get a mortgage in principle. Knowing roughly how much you’ll be able to borrow will help set a realistic budget and save time as you start searching for properties
4. Know the full cost. Stamp Duty, solicitor fees, removal costs and extra furnishings all add up… when calculating your costs, it’s important to factor in these costs too!”

Mortgages 4 Plymouth
– Tricia Kennedy –

1. What is currently happening in the mortgage market, are lenders still lending?
Lenders are keen to lend and are reducing rates almost weekly.

2. Have Mortgage rates dropped and what is the average lender mortgage rate?
When Liz Truss and her chancellor made their announcements, rates rocketed to in some cases 7%

3. In your opinion do you think mortgage rates will stable this year?
Some rates are now 4.49% which would have been considerably higher. I believe rates will continue to fall despite the anticipated 0.50% increase by the Bank of England Due in February. Providing inflation is falling, I expect to see rates continuing to fall this year and next.

Woollcombe Yonge
– Alicia Hopkins –

1. What is currently happening in the housing market, are people still buying and selling?
Yes, whilst the market seems to have quietened down following the SLDT rush, we are still seeing a steady stream of instructions for sales and purchases.

2. How long on average will the Conveyancing process take when buying/selling a property and what is involved?
On average, a conveyancing transaction will take 4-12 weeks from the seller’s solicitor issuing draft contracts through to completion. Once the contract pack has been received by the buyer’s solicitor, the documentation will be reviewed, and any necessary enquiries raised. The buyer’s solicitor will order property searches if required (the return time for searches will vary depending on the local authority). The searches will also need to be reviewed and enquiries raised if further information is required. Once all enquiries have been satisfied, the buyer’s solicitor will report to their clients and both parties will arrange for their clients to sign documentation in readiness for exchange of contracts. When all parties are ready, a completion date will be agreed, mortgage funds requested (if applicable) and contracts will be exchanged.

Time frames will be impacted by various factors such as:
• Whether the buyer requires a mortgage
• If the property is leasehold – as information packs will be required from the Landlord and/or Management Company
• If the property is newbuild – as completion will take place on notice if the build is not complete
• Whether there is a chain
• Whether it is a probate sale, as delays may be caused whilst waiting for the Grant of Probate

KF Kitchens
– Nathan –

1. How much appeal does a new kitchen have on potential buyers?
“A new kitchen will always add value to a property against an older one. However, the amount of value it adds will be dependent on how well the kitchen is designed, future proofed and economically laid out. A poorly designed kitchen may add a little added value to a new buyer who may feel that they would want to change it. Alternatively, a well-designed kitchen can add more than the cost of the purchase as its value and appeal are increased by intangibles, where new buyers can picture being and living in the room setting that adds value that cannot be described in figures but by appeal. It is why a good well-designed kitchen adds significant value, a poor one minimal value and why the client’s decision of where to purchase is so important. They should think of the end results being closer to buying an extension than buying a product that sits in their house”

Tech Surveys
– Mick Quick –

1. Is having a high EPC rating more appealing to potential buyers, if so why?
With a higher EPC rating of a C or above Landlords will be ready for the new MEES level which will be changing soon. It also means that a potential buyer could take advantage of any green mortgages being offered. Having a higher rated EPC is normally an indication that a property is more efficient and so should have lower energy costs.

2. What can you do to increase your EPC rating right now?
A good way to increase an EPC is Solar PV, the reason for this is because when generating it draws less electricity from the grid thus reducing your energy bills.

Another way is insulation in the loft, the first 100mm has the biggest impact with more heat being trapped in the property the higher the insulation the better, also not using the loft as storage helps as once anything is placed on insulation it reduces the depth making it no longer useful. If you do decide to use the loft space for storage top up the insulation to 270mm and use risers then board this ensures the the insulation is doing its job. Heating controls help, I do a lot of properties that only have a programmer or TRV’s having all 3 controls help for your heating which also improve’s an EPC Programmer, Room Stat & TRV (thermostatic Radiator Valve)