A new reality in the housing market

Phillips George
30 October 2023
Buying | Selling

A new reality in the housing market

Less is more in an age of caution

What is more British and home ownership? In neighbouring countries people are quite happy renting for their whole lives and would never consider buying a house to call home. Even in some of the wealthiest European cities, including Paris and Milan, home ownership is the exception and renting the norm.

Home ownership gives us security and over decades can bring wealth as house prices increase. Well, at least that is the theory. I may own a house valued at 5 times the amount I paid for it some decades ago, but it is not the case I can simply cash in the money and buy a yacht. I still need somewhere to stay, and downsizing is rarely a desirable option.

Mind the gap

In relative terms, house prices are now so much higher in real terms than they were 20 years ago. This creates a growing problem for first time buyers as the amount needed for a deposit, and the proportion of income paid in monthly mortgage payments is at an all-time high. So first time buyers must save for years, even decades to get a foot on the ladder, or some luckier buyers might be supported by parents or grandparents. However, once on the ladder, we know that we have a financially secure future and a place we can call home.

This is far from an ideal situation for first time buyers, and it would take political and infrastructural decisions on a national level that we don’t seem able to make, to begin to address the discrepancy between income and house prices.

The myth of continual improvement

In the short term and when we look at our home purely as investment, it can be exciting to see the value of our property increase. However, in many ways this is an illusion. In reality it means that the cost of buying a new home will have increased proportionally, cancelling out any gains.

First Time Buyers

The recent deflation of housing values has consequences for our clients. Although the market is more difficult for first time buyers, it brings opportunities as there is less competition for housing and house prices are consequently lower. Of course, higher mortgages are bringing other challenges, but do the maths and you might find a window of opportunity.

Buying and Selling

It is time to think about your home in a different way. The value of your property is not going to increase by 20 per cent in the coming year, but neither is the property you are looking to buy. Property prices have a way of balancing out between buyer and seller.

Clare Phillips, Partner at Phillips George says; “We have seen big changes in the property market over the last year. We are seeing a new pragmatism among sellers with the realisation that they are not going to get the high prices we saw during the pandemic, but equally, when they sell, opportunities are there to buy at lower prices too. We have experienced strong sales over the past few months despite all the doom and gloom, but buying and selling in this new environment means being realistic about what price your property can achieve.”

Talk to us about what you can realistically expect in this market, and with good advice and assistance from Phillips George you can still move house effectively.

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Clare Phillips
Clare Phillips, Partner
Clare has been in the industry since 1998. Her career started as an administrator and she has worked through each role in estate agency from negotiator, sales progressor, valuer, manager and culminating in opening Phillips George as a co-founding partner. Through Clare’s career she has obtained professional qualifications with both NAEA (national association of estate agents) and ARLA (association of residential letting agents) to ensure that she delivers a first class service to all of her clients. Clare’s favourite part of estate agency and lettings is helping customers achieve their goals and making the process as smooth as possible for them.