Podcast Summary
Signs of buyer demand picking up and asking prices rising: Despite economic uncertainty and falling property prices, buyer demand is increasing and asking prices are on the rise, potentially signaling a return to normal market conditions
Despite the economic uncertainty and falling property prices being widely reported, there are signs of buyer demand picking up and asking prices rising, as shown in Rightmove's latest house price index. This could indicate a return to more normal market conditions, even if sales data has yet to reflect this trend. Another key point is the upcoming release of an updated version of Rob D's book, "The Price of Money," which has been signed for publication by Penguin. These developments offer some interesting insights into the current state of the housing market and the ongoing impact of economic factors. Keep an eye on these trends and stay informed by following The Property Podcast and subscribing to their weekly newsletter, Property Pulse.
Free video course with book pre-order: Pre-ordering a book grants access to a free video course, increasing value and providing early access to content. Predictions should be based on reasoning, not just numbers.
Pre-ordering the upcoming book comes with an enticing incentive: instant access to a free video course. This not only provides early access to the content but also enhances the value of the book once it's released. Additionally, the importance of understanding the reasoning behind predictions, rather than just the numbers themselves, was emphasized. The speakers' predictions for the market growth this year differed from the consensus, but the process of arriving at those predictions was explained in detail to help listeners make informed decisions based on their own convictions. The speakers' predictions were also contrasted with those of other experts, who predicted much larger drops in the market.
Experts predict falling inflation and stabilizing housing market: Experts expect inflation to decrease, leading to lower mortgage rates and a more stable housing market due to a more predictable economic outlook
The experts on this property podcast are predicting a slowdown in inflation, which will lead to a decrease in mortgage rates and stabilize the housing market. The inflation rate has been high due to various shocks to the economy, but these shocks have largely passed, and inflation is expected to fall. With falling inflation, the Bank of England is expected to slow down the pace of interest rate increases, leading to more stability in the housing market. The unpredictability of the previous year, with frequent changes in government policy and interest rates, caused market instability and uncertainty. However, with a more predictable economic outlook, the markets are expected to gain confidence and see less volatility.
Impact of Financial Market Instability on Mortgage and Property Markets: Financial market instability led to increased mortgage rates, lender uncertainty, and a pullback on new loans. However, as markets stabilize, lenders are expected to become more competitive, improving the mortgage market and positively impacting the property market in 2023.
The instability and uncertainty in the financial markets last year significantly impacted the mortgage market and, in turn, the property market. Mortgage rates are influenced by various factors, including market expectations, lender sentiment, and capacity. When these factors turned sour in the last quarter of 2022, lenders were forced to constantly adjust their rates and pull back on new loans due to high demand and difficulty maintaining service levels. However, as stability returns to the markets, lenders are expected to become more competitive and confident, leading to a gradual improvement in the mortgage market throughout the year. Additionally, the overall sentiment of the UK economy, as reflected in consumer confidence indexes, was at a major low at the end of 2022, contributing to the uncertainty and fear in the market. Although interest rates needed to rise for the economy's health, the rapid increase was not beneficial and caused panic. Now that things have stabilized, the mortgage market's improvement and lenders' renewed confidence will have a significant impact on the property market moving forward in 2023.
Improving sentiment in the economy and job market: Despite economic instability, the UK housing market is predicted to remain stable in 2023 due to improving sentiment driven by a strong job market and slight economic growth.
Sentiment plays a crucial role in the economy and the property market. Despite the UK economy experiencing a period of no growth, sentiment is improving as the recession might not be as severe as initially feared. Additionally, the job market remains strong, which helps to keep people feeling secure in their employment and less likely to sell their homes. These factors contribute to the prediction of a stable housing market in 2023, despite last year's economic instability. The economy's recent growth, albeit slight, and the resilience of the job market are key reasons for the improving sentiment and expected stability in the property market.
Low risk of mass repossessions leading to housing market crash: Government efforts, lender forbearance, and improved underwriting practices reduce the likelihood of a large number of repossessions causing a housing market crash in the UK
Despite economic uncertainty, the risk of a large number of repossessions and subsequent foreclosure sales flooding the UK housing market with cheap property, leading to a crash in prices, is low. This is due to several factors, including the government's desire to prevent such an outcome, the major lenders' willingness to show forbearance to struggling borrowers, and the improved underwriting and stress testing practices in place since the 2008 financial crisis. While there may be other factors depressing house prices, the potential wave of repossessions is not expected to be one of them.
Mortgage rate increases could lead to UK property price declines: Mortgage rate hikes could cause UK property prices to fall, particularly in areas with affordability issues like London, but not all regions and property types will be affected equally.
While there are numerous reasons for predicting a decline in UK property prices, the impact of mortgage rate increases cannot be ignored. This factor could potentially outweigh all other reasons and cause prices to continue falling, especially in areas where affordability is already stretched, such as London. However, it's important to note that not all areas and property types will experience price declines. Some regions and property types may see price increases, making it crucial to consider local market conditions and specific property types when making predictions. Overall, the housing market outlook is complex and multifaceted, and it's essential to look beyond the UK average to gain a more accurate understanding of the situation.
Risk for price drops in certain properties, city center apartments may perform better: Some larger houses in rural areas face risk for price drops due to market saturation and changing economic conditions, while city center apartments may perform better due to rising rents. Individual cases should be considered instead of relying on averages.
Certain types of properties, particularly larger houses in rural areas that have seen significant price increases in the last couple of years, are at higher risk for price drops due to market saturation and changing economic conditions. Conversely, properties like city center apartments with rising rents may perform better as investments. It's essential to consider individual cases rather than relying on averages, as not all parts of the market will be affected equally. Some negative forecasts may be overgeneralizing based on specific market trends in certain areas. The year is expected to have a rough start, with the first quarter being the worst, but improvements are predicted for the following quarters. However, it's important to remember that these predictions are not guaranteed and that the market is complex and nuanced, with many varying factors at play.
Economic and property market trends for 2023: A promising second half: Despite a challenging first half, experts predict an improvement in economic and property market trends in the second half of 2023. The traditional 18-year property cycle may not align with current conditions, but the speakers remain confident in their predictions.
The economic and property market trends for 2023 are expected to improve in the second half of the year, despite a potentially challenging first half. The speakers agree that any negative trends may last a bit longer than anticipated, but they remain confident in their predictions. However, the current market conditions do not align with the traditional 18-year property cycle, leaving some questioning its relevance. Next week, the speakers plan to explore whether the property cycle is broken or if there's still hope for it. In the meantime, they recommend checking out a resource created by a listener, and they'll share more about it in the Hub Extra segment.
New app Splitmyfare helps travelers save on rail trips: Splitmyfare app finds cheaper rail fares by splitting journeys, available on iOS and Android, no booking fee, potentially bigger savings than train line's feature
There's a new app called Splitmyfare.co.uk, which is specifically designed to help travelers save money on rail trips by splitting their journeys into two parts if it results in lower costs. This app, available on both iOS and Android, is said to find more savings for users more often than the train line's feature, and even if it doesn't, it doesn't charge a booking fee. The host plans to test this app on an upcoming train trip to Manchester and is excited about the potential savings. This new tool is especially valuable given the high cost of train travel, and it's an added bonus that it's a listener-created solution. So, if you're looking to save money on your rail trips, consider giving Splitmyfare a try.
