As we go into the second quarter of 2023, there is significant uncertainty in the UK economy, which can lead to uncertainty in the property market.
The number one issue is the fight against inflation and the cost-of-living crisis. The Bank of England is working hard to decrease inflation, and hopefully, in summer, we should see British inflation coming down. From that, we should expect interest rates to come down later in the year.
Then there is the issue of house prices. Will they crash? I don’t think so. Sure, we are seeing a slight “adjustment” however the reality is that the Land Registry states Lancaster house prices are only 0.4% lower than two months ago. Plus homes are selling, and they are selling well.
Why do people move?
Life events often drive someone to buy (or sell) a home. Every potential home buyer should ask themselves these two questions if they are considering a purchase.
- Am I in a stable financial position? Do I have a deposit and enough savings?
- Do I plan to be in this neighbourhood of Lancaster (or the village) for at least the next five years?
If you answer yes to both questions, then buying now makes sense. But if the answer is no to either of these two questions, consider waiting until both answers are yes.
Being in the Lancaster property market for as long as I have, the one thing I have learned, both personally and dealing with many people moving home in Lancaster over the years, is this. The time to buy is when your ‘life events’ merit purchasing a home.
Note I say home and not a house. A house is a physical structure, whilst a home is a feeling. Don’t lose sight of the real reason for your move – to build a home for yourself and those you care about.
Of course, Lancaster house prices may fluctuate up or down in a 12 to 24-month period, but if you plan to have a minimum of at least five years in your new home, there are clear benefits to buying and owning a Lancaster home.
Many times, so many people get caught out trying to ‘time the market’. Instead of trying to ‘time the market’, the vital thing is ‘time in the market’. Over time, home ownership always wins over renting.
I appreciate over the past few years many people have found it almost impossible to buy a home. In 2021/2, queues were outside open houses, multiple offers to one place, rocketing house prices, and limited homes for sale. Yet, that has now changed. There is an increasing number of Lancaster properties on the market.
In September 2022, there were 289 properties for sale in Lancaster; today, it is 365 properties.
Also, house prices achieved today are slightly lower than last year, mainly due to the fact buyers are no longer having to outbid each other the way they were last year. That means many Lancaster people who couldn’t buy a home over the past couple of years are finding the market much more accommodating now.
What is the property market outlook for the rest of this year and the future?
Some people are trying to compare the current 2023 UK property market with the 2008 property market, yet there are significant differences between the two years.
- Difference #1 is there is a massive amount of equity in homes today compared to 2008 (£189,500 today vs £135,900 in 2007).
- Difference #2 was the stock levels of properties for sale. The number of properties for sale in Lancaster jumped from 482 in early 2007 to 722 in late 2007. Even though there has been an increase in properties for sale in Lancaster over the last six months (as mentioned in the article earlier), it has yet to be on the scale of the jump in 2007. This oversupply of the property was a significant cause of house prices dropping in Lancaster in 2008.
- Difference #3 is there is a lot less unemployment in the economy today than in 2008 (3.2% today vs 5.6% in 2008).
- Difference #4 is that most people (87%+) are on fixed-rate mortgages compared to 56% in 2008, so the increase in interest rates is not so much an issue compared to the run-up to the Credit Crunch in 2008.
Next, you must remember that in Lancaster it isn’t just ‘one property market’. There are ‘micro’ property markets within the whole Lancaster property market.
There is still an undersupply of certain types of Lancaster properties, meaning in those ‘micro’ property markets, supply can only partially satisfy the number of buyers wanting to buy a home, meaning house prices in those sections are holding up. Yet on the other side of the coin, there is an oversupply of some other Lancaster properties. Some of the increase in the overall number of properties on the market comes from overpriced Lancaster homes in the ‘oversupplied’ micro property market.
If you want to know which ‘micro’ property market you are potentially selling in and potentially buying in (i.e., whether they are in an under or over-supplied ‘micro’ Lancaster property market, drop me a line or send me a DM).
These are my thoughts? What are yours? I’d love to know!
If you would like to chat about the Lancaster housing market, please get in touch. At JDG we are always here to help.
Thanks for reading
Michelle x
