Hey, I'm Matt. I've worked for several years in financial services & banking for one of the UK's largest banks in London and now work as a senior product manager in a global startup. On the side, I'm building a property development group utilising all my leadership, project management and financial experience. I'm helping share my knowledge of working in these roles mixed with the world of property.
Buy a house now... or wait until 2023?
👋 Hey friends
Premier Property Lawyers are still being the biggest pain in the bum in our property sale. My buyers mortgage expires in 3 weeks and they keep raising endless menial enquiries at the last minute that keeps holding us back.
I repeat my advice from the last newsletter - never ever use any of the conveyancing brands under the Simplify group. They're awful.
In other news - the property market has took an incredible flip over the past few weeks, we really did not expect interest rates to go so high and then the government mis-align their strategy with the bank of england causing a huge run on the financial markets.
The news is going crazy about a property crash, dooming headlines predicting 30% crashes - a lot of it is rubbish. So I'll try to explain what's really happening.
TLDR: The property market is slowing down due to unaffordable mortgages - ultimately this will cause a drop in prices but it won't be an overnight crash.
🏡 Property Market Latest
There's 2 problems, one has already materialised and the other is looming on the horizon
The Immediate Issue
Anybody on a variable rate mortgage has already been hit hard by the interest rate rises. I've been enjoying a 0.1% interest mortgage which was a staff product from my days at Lloyds Banking Group - I left last October but thankfully they hadn't noticed until almost a year later. The bad news is that my rate will increase on December 1st from £300 per month to about £950 per month. My rate is increasing to 5.7%.
Thankfully, I have enough disposable income and business income to subsitute this massive increase in my mortgage repayments next month but the immediate problem is a lot of families have experienced this and do not have an extra £600 per month to spare on top of soaring food and energy bills.
Even if these people wanted to move - even the fixed mortgages are expensive so people continue to rent or young professionals live with their parents and wait it out.
The Delayed Issues
People who are on 2 and 5 year fixes coming off them soon will also begin to have a hard decision... do I fix on a new high 7% rate - or weather the storm on a variable rate until things calm down?
Either way - this also means people will have to front up a lot more cash.
The Problem
In both scenarios - people's monthly cashflow has really been hit hard and we've been used to cheap lending for years. Problem is, we have our hearts set on beautiful homes and max our our mortgages - that same mortgage 12 months ago is now 2 - 3x more expensive. This is causing more homes to come onto the market at people sell due to not being able to afford their upcoming mortgage repayments - but then nobody wants to buy expensive houses or max our their lending and pay an unaffordable fortune on the mortgage.
The reality is - nobody knows what will happen but the key determining factor is interest rates. They will control the outlook in 2023.
📺 YouTube
YouTube: Should you buy a house now or wait until 2023?
I explore the current look of the market and economy to help understand what First Time Buyers, Remortages & Movers, and Investors should do. Check it out
Speak soon
Matt
Matt Brighton
Hey, I'm Matt. I've worked for several years in financial services & banking for one of the UK's largest banks in London and now work as a senior product manager in a global startup. On the side, I'm building a property development group utilising all my leadership, project management and financial experience. I'm helping share my knowledge of working in these roles mixed with the world of property.
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