Green Shoots In UK Property Market – Good News For Expat House Buyers
The Royal Institution of Chartered Surveyors (RICS), whose members carry out property surveys and valuations for mortgage banks and building societies, are reporting fewer house price falls in March, with an expectation that prices may start to rise in the next 12 months.
RICS surveys are an important forward looking indicator as to the health of the UK property market, says expat mortgage broker Offshoreonline’s Guy Stephenson. Highlighting the sometimes contradictory picture in the UK housing market, Stephenson continues:
“The Bank of England began pushing UK Base Rate sharply higher, mainly from August 2022, so UK mortgage rates inevitably rose steeply too. This caused a market shock, and housing demand declined rapidly in late 2022, something which has been widely reported. Now, though, we have a new report from the surveyors whose job it is to determine the fair value of a property being bought. After a prolonged period of UK property prices falls, RICS are now far more optimistic on the prospects for the market in 12 months.”
This chimes with data released by property portal Rightmove too, who are reporting both an increase in the supply of homes coming onto the market and deals completed. Comparing the position today to that in 2019, before the pandemic, Rightmove note that the housing market is remaining surprisingly robust, given the economic factors that have affected home-movers over the last six months. Their spokesman said:
“While the market is not moving at the exceptional pace that it has been over the last couple of years, it’s a positive sign that sales at a national level are being agreed at the same rate as the last more normal market of 2019, though there are regional differences across Great Britain.”
Expat mortgage broker Offshoreonline has reported its best figures for expat mortgage enquiries in March since before the pandemic, with volumes now equalling pre-pandemic levels.
“In a very short space of time the main structural issue with the UK housing market, a lack of supply, seems to have been turned around. If anything, we are now seeing an excess of supply over demand, which makes for an ideal situation for expat home buyers. They have more choice and sellers will be more likely to take a good offer, given the shortage of UK buyers, “added Stephenson.
Home-movers are returning to London
During the pandemic, lots of people looked to move to the coast and rural areas in order to access more green space. Rightmove say they have seen a reversal of that trend in recent months, with people looking to return to cities, with much of the increase in sales agreed being on flats, particularly in London. Across all property types, sales are up by 11%, but when compared to March 2019, sales agreed on flats in London alone are up 23%, compared to the same period in 2019.
Are mortgage rates going up or down?
After the chaos of the mini budget in late 2022, happily, expat mortgage rates have settled. The UK economy is still performing well, it has avoided recession and retail sales are still stronger than most people expected. So expect the UK base Rate to stay at or around current levels for a while, thinks Offshoreonline.
“We are not going to get back to the unnaturally low UK Base levels seen over the last 10 years, as ultimately these were due to the Bank of England intervening to offset the dramatic impact of firstly, the financial crash in 2008, and then subsequently the pandemic. Whilst forecasting interest rates is virtually impossible, our view is that the long term average for the UK now is probably a UK Base rate in a range somewhere between 2.5% to 4%, or perhaps a little more, with mortgage rates around 1% above these figures. We currently have a range of lenders offering expat mortgages from 4.99% to 5.40%, so there is a good choice on offer, “ends Stephenson.