This week in the property industry has been packed with news that anyone following the sector should take note of.
If you need any reminder that times are tough, look no further than the news from the start of the week. Headlines everywhere announced that average UK house prices fell by around £1,000 in April, marking the end of three months of increases. While this is not a new trend, it highlights how prices are continuing to drop and that it is not easy to navigate the current market.
Nevertheless, the rate of decline has slowed, and there is still a significant demand for property. Why? Borrowed money remains relatively cheap, and it may even get cheaper soon. While there are small monthly drops in prices, buying property is still the sensible choice for those who don’t want to pay ever-increasing rents with insecurity on the side. We are currently experiencing neither a boom nor a bust, but rather a market where it is equally challenging to sell or buy a property.
The Bank of England’s announcement of another rate rise this week, bringing levels to 4.5 percent, was disappointing but not unexpected. The Bank has limited tools to combat the inflation that is driving up the cost of living, and raising interest rates is one of them. Housing costs such as mortgages and rents have risen by an average of 26% over the last two years, and while the rise in rates may help to control these increases eventually, it will cause more short-term difficulties for millions of homeowners and tenants.
This week also saw the shocking news of Purplebricks’ plummeting shares, falling 60% amid concerns over cash flow. While the company may yet find a buyer, it is unlikely that things will go back to business as usual. The high salaries and millions invested in TV, print, and online advertising are a thing of the past. It’s evident that the great disruptor has itself been disrupted, and major investors are recouping what they can before the inevitable happens. The company’s flawed business model, overreach in the overseas market, poor feedback, customer service levels, and a very public accounting scandal are just some of the reasons behind its downfall.
In conclusion, it’s been a significant week in the property industry, and it’s essential to keep a close eye on the developments. Prices are still dropping, and it’s becoming increasingly difficult to navigate the market. Nevertheless, there is still demand for property, and interest rates may even drop further. With the continued turbulence in the market, it’s never been more important to stay informed and make sound decisions.