Average house prices increased over the 12 months in Wales by £213,000 Wales (2.0%) from the previous 4.1% decrease from 12 months. That is not factoring in the 12 months before October Dooms Day news of increases up to 6.87% average in Wales.
In certain parts of Wales, the likes of Barry, Caerphilly, Myther Tydfil, and Cardiff reached up to 18% growth with a slight slump since October. The market has yet to crash or stop. Everything is still moving, with pricing balancing happing in real-time.
50% of buyers in Wales are to be confirmed to be cash buyers by Zoopla and at RE/MAX Estate Agents Barry. We can confirm we are seeing the exact figures.
Due to the rate hike puts first-time buyers in a tricky position, with lending on LTV being high and deposits sitting at 5-10% against 90-95% LTV with rates sitting at 6.6%, which is a struggle for anyone. Still, we are registering. 50+ First time buyer applicants each month, so the question is, what is happing to the market?
Well, people looking to upsize have a healthy amount of equity. So an average deposit on their side looks between 30-50%, so LTV is much lower to handle the new rates. Downsizing is mostly cash, so the hike hasn't affected them.
"The £450,000 above market is mostly cash buyers and moving quicker than the rest. "
Putting a downsize mover in a cash-from-proceeds position, if looking at the average Wales figure of £213,000 for a property, keeps the market moving.
The lack of stock is the issue, not so much buyers' demand. People unwilling to sell due to needing help finding a property that suits their needs is causing more friction than the rates.
What happens if the Bank of England rate goes up?
Speaking with Kyran Roberts, a senior partner at Affinity Financial, to understand the market and what the forecast is with inflation, he has provided some comments for us to reflect on.
"ONS data published this morning stated that UK Inflation fell to a 16-month low - some welcome news. "
" In May, core inflation came in at 8.7%. Last month it was 7.9%. The drop in June was more than economists and capital markets had forecast. "
" £ Sterling has dropped this morning, and arguably the risk of further interest rate rises has reduced somewhat – a positive step in the right direction. "
" We are still a long way off the Bank of England's target of 2%, but we are trending in the right direction. This is the start of a continuing trend. "
" We will proactively monitor market activity over the coming days & weeks to guide all of our clients through this period. "
If you would like a chat with kyran and his team regarding finances and updates with newsletters, click the box below to get in touch.
Conrad's thoughts on the property market
" With over a decade of experience and working through similar times, we have always bounced back with the property market aggressively."
" This is no different. We are trending with the times of buyers deciding when is the right to buy and sellers asking when is the right time to sell. The barriers are the same with uncertainty with the rates controlling the decision of home movers."
" The information kyran has provided, we can back up a positive statement after a few weeks of receiving little to no viewings. People are calling requesting mortgage advice, and viewing levels are increasing. Has shown us we are heading forward and have more clarity at the ( Peak ) of the market. "
" I am happy to say we have been selling properties since October, almost ten each month on average. Even with price levels balancing, the market has been moving."
" Valuations are returning to normality, but properties are still wanted as buyer demand is still around and hopefully opens the doors for other sellers looking to sell and move forward with their buying journey."
If you want a free valuation from Conrad Binding from RE/MAX Estate Agents Barry, please click the button below.