As we head towards the end of Q3 2022 and say our farewells to a summer that continues to leave my lawn pretty barren, there’s no getting away from that fact that we are entering a period which will prove challenging for many people across the UK from a financial perspective.
It is also likely to be a transitional time for the housing and mortgage markets as we have to factor in the squeeze being placed on household finances, rising mortgage rates, high levels of inflation and a base rate which is widely expected to increase.
These all represent barriers for potential borrowers in their own right but when combined they form a pretty formidable obstacle.
However, there are certainly plenty of reasons to remain upbeat. After all, we are operating in and around a housing and mortgage market which have not only proved itself to be remarkably resilient but we are also operating from some solid foundations.
Let’s break some of these down.
HM Land Registry’s latest UK House Price Index outlined that UK house prices increased by 15.5% in the year to July 2022, up from 7.8% in June 2022. On a non-seasonally adjusted basis, average house prices in the UK were suggested to have increased by 2.0% between June and July 2022, up from a decrease of 4.8% during the same period a year earlier (June and July 2021).
House price growth was said to be strongest in the South West where prices increased by 20.7% in the year to July 2022. The lowest annual growth was in London, where prices increased by 9.2% in the year to July 2022.
The Bank of England’s Agents summary of business conditions 2022 Q2 reported a modest increase in the availability of properties for sale across the UK and house price inflation starting to moderate in some areas.
The UK Property Transactions Statistics showed that in July 2022, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 104,470. This is 36.7% higher than a year ago (July 2021).
Data from the Bank of England’s Money and Credit report for July 2022 also showed that mortgage approvals for house purchases, an indicator of future borrowing, increased slightly to 63,800 in July 2022, from 63,200 in June 2022.
In addition, we now have a new Prime Minister in place after precious little proactive political intervention over the course of the summer.
On the back of this, it will be interesting to see what the impending ‘mini-budget’ has in store for the UK population, the housing market and how much detail it will go into regarding the cost of the recent energy plan – which was a much needed interjection – and the potential short, medium and longer-term impact on the economy.
We live in interesting and testing times, but there is definitely room for opportunity and optimism within them, especially when operating in a mortgage market where the value of advice in such a complex borrowing and lending environment continues to rise, at pace.
Matthew Cumber is managing director of Countrywide Surveying Services