Since last autumn, there’s been much doom and gloom around the UK property market, largely to do with the cost of living crisis and increased mortgage rates.

Had you bought an investment property or property to live in, last May for example, with a decent deposit, you could easily have secured a fixed rate deal of 2% or less.

No longer though.

Interest rates and inflation have been on an inexorable rise and in June alone, some 800 mortgage products were pulled from the market. Base rates now sit at 4.5%, from a historic low of 0.5% just 2 years ago.

Hogan’s operates its property rental and sales model in an affordable corner of Leeds: Harehills, Burmantofts, East End Park, where houses and flats remain relatively affordable. They’re not at Burnley or Blackburn levels (where you can pick up homes for under £50,000) but £100,000 to £150,000 will secure you a sturdy home or investment in east Leeds.

House prices have been predicted to fall by 10% between May 2023 and May 2024, but some property experts are saying now that this is unlikely.

Why?

  1. Nationwide is showing property price trends as low: in fact they are touting decreases of 3.4% over the next 12 months with the proviso that areas like London are more likely to see such falls. Lower priced areas will remain unaffected and may even rise.
  2. Net migration is rising. 600,000 people entering the UK require rental properties and homes to invest in.
  3. Unemployment remains low. In the 90s, unemployment stood at 3 million and interest rates peaked at 15% – resulting in a property price crash.
  4. With a General Election due in 2024, politically there will be pressure on the Bank of England to cut interest rates.
  5. Inflation is slowly reducing and the cost of living crisis, though still very real, is easing a bit. Look at petrol and diesel prices – diesel was £1.99 per litre a year ago, now it is 60p cheaper.

The economy may still fall into recession this year as a result of interest rates staying higher for longer than previously envisaged, but there is no immediate prospect of a wave of newly unemployed owner-occupiers having to sell up. Larry Elliott, The Guardian.

Rightmove, looking at Leeds as a whole, and not just east Leeds confirms too that prices are unlikely to fall:

Properties in Leeds had an overall average price of £257,819 over the last year. The majority of sales in Leeds during the last year were semi-detached properties, selling for an average price of £256,771. Terraced properties sold for an average of £188,943, with detached properties fetching £481,696. Overall, sold prices in Leeds over the last year were 6% up on the previous year and 12% up on the 2020 peak of £229,265.

If you’re looking for property investment advice or to change letting agencies, we have an offer on too.

You can read more about it on our active social media channels or contact us at enquiries@hogans.co to find out more.