Season's greetings and a quick 2022 property market recap
As we close the chapter on another year, we can reflect on what has certainly been another bumpy 12 months across the property market.
The biggest talk of the year has largely centred around interest rates with the Bank of England gradually raising rates throughout the 12 months, from a starting rate of 0.25% in January 2022 to the 3.5% we’ll be ending this year on.
Monetary experts predict that interest rates will likely continue to rise beyond 4% by the end of quarter one 2023 as the fight against inflation continues, but I guess we shall wait and see.
Impact of interest rates on the property market
Of course, interest rate rises and decreases have a significant impact on the property market, so though demand for property certainly remained strong throughout the year, the gradual increase in interest rates has slowly brought down the amount that many lenders are willing to lend borrowers.
The year or two prior to 2022 - when interest rates were at an all-time low, everyone was dealing with the uncertainty surrounding the pandemic and the government were keeping things afloat with the furlough scheme - saw property values and rental prices increase at a remarkable pace as we saw disparity between property supply and demand.
This year of interest rates rises has so far helped to cool that surge in property values, but has been gradual enough to avoid any significant crash in prices.
Instead, things have somewhat levelled out, though it’s worth noting that it does typically take several months for the market to begin reacting to the most recent interest rate changes.
Therefore, if interest rates do continue to rise into 2023, lenders may have to further cut back on the borrowing they offer to lenders while their mortgage product rates continue increasing - so it’s worth bearing that in mind if you have big financial plans with regards to a property next year or if you have a landlord on the brink of increasing the rent once their current buy-to-let mortgage product fixed term comes to an end.
Introduction of the RHWA
For landlords and tenants, this final month of the year also saw the much-awaited introduction of The Renting Homes (Wales) 2016 Act after it’s original July date was postponed.
The implementation act was dubbed the biggest change to housing law in Wales for decades, so if you’re a landlord or tenant in Wales, make sure you’re fully clued up on everything you need to know about the new Welsh housing laws.
Planning to buy, sell, let or rent in 2023?
For those who are looking to kick their plans into gear as we head through 2023, whether you’re someone who will be buying, selling, letting or renting a property in Cardiff, don’t hesitate to get in touch with our team of property experts here at CPS Homes so that we can discuss how we can help with your situation.
So, with all of that said, the entire team at CPS Homes we would like to wish you a very merry Christmas and a happy new year!
