PROPERTY
BUYER’S DILEMMA Interest rate changes could be the catalyst the market needs to spur buyers
Bidwells. “It’s a real buyer’s market at the moment. Generally speaking, values are about 10% down on last year. We’re still selling, but the sales team are working harder for those deals.” To Andrew Bush, managing director of Bush & Co, the rising cost of living is partly responsible for the decrease in the number of transactions. “The normal cost of life has gone up, so the number of people moving is not as high as it used to be.” Bush found that properties valued above £1 million are slower to sell, while demand is being driven by three-bedroom family homes priced between £500,000 and £800,000. Most, he states, are purchased by owner-occupiers in their 40s, usually up or downsizing from elsewhere in the city. They are looking for proximity to schools, work and facilities. As a result, Andrew says he has seen prices jump between 5% and 7% on three-bedroom houses this year, which he expects to continue. “We’re at a watershed moment in the marketplace. With the election, we don’t know what the governing parties will do. For us, the most important factor is seeing an interest rate drop; money will get cheaper.” Lower borrowing rates, he anticipates, will in turn push house prices up. “I have said to people: ‘Get in as soon as you can – prior to interest rates going down – because capital values will rise.’” Until then, uncertainty surrounding the election is likely to further slow down the sales market. Alex expects some buyers to be more cautious about making offers, while those in a position to delay their move – up-sizers, for example – might sit tight for a little bit longer, until they know where the land lies. “It’s common for the sales market to slow down prior to an election,” adds Stephanie McMahon, research director for Bidwells, who says an early election could be a positive thing. “If the election was in October or November, as originally touted, we would have expected the sales market to have slowed down for longer. Because
We’re at a watershed moment in the marketplace
A fter a tough 2023, forecasters began the year more optimistic about Cambridge’s property market. It would become more buoyant – a report from Savills suggested – with the city’s growing tech and science industries attracting buyers and investors. But in May, prime minister Rishi Sunak announced that this year’s general election would take place on 4 July, much sooner than anticipated and casting a new cloud of uncertainty into otherwise brightening skies. So, what now?
Slow sales An election is unlikely to improve the number of property transactions – which have been in decline for the last decade according to HM Land Registry figures – and continued to drop this year. “There has been a massive reduction in the total number of transactions,” notes Rob Price, director of Belvoir. “It’s a chicken-and- egg situation; if you’re not selling, you’re probably not looking to buy either.” “It’s been challenging,” confirms Alex Bloxham, head of residential lettings at
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