We all watched with eagerness as one of the UK’s greatest assets, the property market, climbed to dizzying heights in the run-up to Christmas last year – leading to great whoops of joy that, finally, we were emerging from the darkness characteristic of previous years.
The tricky job left to government was to engineer a situation whereby this growth was encouraged, whilst tempering fears that it could lead to another crash, in the form of a burst so-called ‘housing bubble’ – and, it has to be said, they have done a remarkably good job of this.
The introduction of the MMR reforms in April has had a two-fold effect: it has forced buyers to take greater caution when applying for a mortgage, while seeing sellers eager to settle for lower offers, in order to avoid any further delays to the sale. So while fewer buyers are coming to market, house prices are not climbing at the same pace as before.
In addition to this, the imminent increase to interest rates has also ensured buyers are proceeding with greater caution. And so we conveyancers have watched on as the market has begun to slow. But the question now is whether this slowdown is permanent? The answer is certainly not.
While potential buyers get to grips with the ins and outs (for there are many) of the new mortgage rules – the fact that now is a good (even great!) time to sell property has not been lost on anyone. Sellers are selling and, in time, buyers will be buying again.
A sure indication that there are more good times to come is the increase in sale and purchase transactions we have been seeing over the last few months. This is an irrefutable sign that the market is becoming more fluid as families find it easier to sell one property and buy another – something we have not seen for some years and certainly not since before 2007.
All in all, it is one of many factors suggesting we have much to look forward to this autumn and beyond.
*Eddie Goldsmith is Chairman of the Conveyancing Association and Senior Partner at Goldsmith Williams