Introducing our 19th October Auction Sale
This is our eighth auction sale for 2022 and one of the largest catalogues we have ever produced. It is stacked full with fantastic value lots and an indication that whilst some sellers come out of fixed rate borrowing deals, they need to sell and buyers can take advantage of heavily discounted prices whilst still being able to lock in to great value mortgage and other borrowing products available.
Clearly there is a lot of talk about the economy, housing markets and interest rates so I thought it appropriate to give a bit of a view of this from my perspective. For several years we have experienced a market of ultra-low interest rates which in reality, we know could not be sustained in the long term. In July 2018 the Bank of England (BoE) base rate was 0.75% and remained at this level until March 2020 and in March of that year Covid hit the world and all world economies and central banks had to respond. The BoE ultimately dropped the rate in the UK to 0.1%, a level never seen before in history and one that we may never see again however, exceptional circumstances require exceptional measures. In fact in late December 2021 a homeowner with a reasonable deposit or equity to borrow for a move or re-mortgage could secure a fixed rate deal at 0.99% with that deal fixed for five years.
As the world began to emerge from the nightmare of Covid and we returned to normal the exceptional measures taken by the BoE started to reverse. In recent weeks as a reaction to so many factors, not least the “budget”, rates have had to rise again, the main driver being to try and slow inflation. Bottom line, if inflation gets out of control we won’t be able to afford anything let alone a mortgage payment!
There were other announcements in the budget however; the capping of energy bills means that some pressure on household budgets is relieved and we have already seen the cost of fuel at the pumps come down in any event. Some of the tax relaxation will also help household budgets and there are other measures that mean whilst we may be in for a bit of a rough ride, the peaks putting real strain on household budgets will have flattened somewhat.
Of course the other major announcement was the change to stamp duty (SDLT). For a home owner moving house this is a decent saving, the average UK house price is currently £286,397, before the budget the SDLT cost would have been £4,319, this is now £1,819.85, a significant saving equivalent to very nearly 1% of the purchase price, all of which can now go towards a deposit thus increasing equity and reducing borrowing costs.
So, why buy a property now? The underlying facts still remain, there isn’t enough housing stock to meet demand and there is no chance that in the medium term that enough new housing will be constructed to make any real dent in this imbalance. The cost of borrowing has gone up but is likely to plateau and remains at a level far below that which we saw in the early 90’s. The cost of buying has dropped. For investors, you can still secure long term fixed rate deals, you will get decent returns on your investment and, if you are looking at this for pension planning, just look at the alternatives with the recent news that the BoE has had to buy up government bonds to prop up that market singularly to protect those very same Pension Funds that would have you believe your money with them is safe!
These are my opinions and one could say I am biased having done this job and been in the industry for over 35 years but, I see what my clients paid for properties over a number of years and now, many of those clients have been able to retire early simply because they bought and held stock through all market fluctuations. You must however seek professional advice with any investment purchase and indeed any auction purchase so, before you wave your hand and the gavel falls on your bid, make sure you have first done all your due diligence.
Finally, with the size of this catalogue we’ll have a full day at The Grand Connaught Rooms. Do please come to the sale and bid there rather than relying on your broadband or mobile phone connection to make such an important purchase.
We are here to help with all your enquiries in the lead up to the auction and look forward to seeing you at the venue on the day and wish you the very best of luck with your bidding!
