Q. House prices are falling and while we own our home with a mortgage, we’d like to move up the ladder in the next two years to have more space for our growing family. Even though our house price is likely down, is it possible to upsize to take advantage of bigger discounts further up the ladder? 

A. It is certainly worth investigating to find out whether it’s a good time to move with regards to the type of property you are looking for in your area.  

We are finding that some buyers are taking advantage of the vulnerability of some sellers to purchase at what they believe to be more realistic prices, depending of course on personal circumstances and mortgage exposure.  

If you have been able to build up a good amount of equity in your home, this will help you to take advantage of any opportunity that comes available.  

However, even if not it is certainly worth making enquiries to ensure that you are ready to act quickly if an opportunity to move does arise, particularly in the summer months when competition is generally less fierce as so many people are on holiday. 

It is always best in these circumstances to concentrate on the difference between the selling price on your property and what you might be paying for another one, rather than focus on achieving a certain amount for your own home.  

You must also take into account the fact that interest rates may go up a little further before they begin to level off or even the most recent gains begin to be reversed.  

If you are on a fixed-rate mortgage, check whether you have to pay early redemption penalties for getting out of the mortgage ahead of the end of the fixed period if you can’t port it to a new property. If there are hefty charges to pay, it may be worth waiting until this is no longer the case or any discount you get on your property purchase may be wiped out. 

It is all very well for lenders to have their stress tests but we are finding a lot of buyers have their own stress tests – what they consider manageable, not just in terms of mortgage repayments but also in terms of their other expenditure or lifestyle. It’s worth asking yourself if you can afford a bigger mortgage on a more expensive house, for example. 

Therefore, overall it’s definitely worth investigating but go in with your eyes open and research carefully before making a decision. It may take time to find the right property but it is certainly worth considering as this could be the best opportunity for a while to move up the ladder. 

Jeremy has been principal of Jeremy Leaf & Co Chartered Surveyors and Estate Agents, in Finchley, north London since March 1984. The business has grown organically to employ 22 people today and, although still run as a general practice covering sales, lettings, surveys, valuations, etc, it has become particularly synonymous with land and new homes. As a result, the business has been directly involved in the acquisition and sale of over 200 schemes in London and the Home Counties. Jeremy is also a former residential chairman of the Royal Institution of Chartered Surveyors. 

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From central London house prices falling, to supermarkets influencing shoppers and what UK unemployment and wage growth changes mean for you – here are our favourite must know money stories this week to help you get your head around your personal finances. 

Central London house prices suffer 

Central London property prices dropped almost 5% in the 12 months to March, reports Joshua Oliver for the Financial Times. This was the largest annual fall in three and a half years, with the price of property in prime areas of London dropping to £1,261 per square foot last month, down from £1,326 a year earlier. 

According to data provider LonRes, this is the lowest level since mid-2021. Anthony Payne, managing director at LonRes said: “The steam has come out of the market. It was a bit inflated last year.” 

Buyers have become more cautious over concerns prices could still fall further thanks to a combination of factors including concerns over the economic outlook and rising interest rates. 

James Forbes, director at London estate agency Forbes Gilbert-Green expressed his longer-term concerns around London maintaining its position as a global financial centre. ‘Brand London’ is the core of the housing market in Central London, and it is essential for it to remain positive to drive investment, he said.  

How supermarket loyalty cards influence buyers 

Gone are the days when loyalty cards encouraged shoppers to build up points to redeem at supermarkets. Now, supermarkets are rewarding financially-stretched customers with immediate discounts in the hopes of retaining their business, amidst the soaring cost-of-living, writes Kevin Peachey for BBC News.  

Supermarkets – such as Tesco, Sainsbury, and Boots – have repositioned their customer loyalty strategies toward day-to-day discounts, to try and compete with other discounters. Even the discount labelling is carefully chosen – for its warm and welcoming ‘yellow’ colour – attracting customers eyes and marking a change in tactics by retailers. 

However, the pitfall for shoppers is that these loyalty card discounts make it more difficult to compare prices and work out value for money. 

Consumer insight specialist Kate Hardcastle said that supermarkets: “Are reminding you that if you are loyal, they are literally treating you differently as a customer. They want a narrative that they are the best and the cheapest.” 

Retailers are also exploring potential options for loyalty programmes to reward sustainability. The clear benefit for companies is that they can meet their eco targets and boost sales because loyal shoppers will return to the brand for their next purchase. 

What do UK unemployment and wage growth mean for you? 

Wage growth remained at 5.9%, a higher level than expected, according to data from the Office for National Statistics (ONS). However, this could prompt the Bank of England to hike interest rates again, reports Nicole Garcia Merida for Money Week.  

While growth in regular pay, excluding bonuses, held at 6.6% as of February 2023, inflation has been eating away at pay growth. When adjusted for inflation, real pay fell 2.3%, and total pay fell 3%. 

Unemployment rose slightly to 3.8% from 3.7% in January, reflecting business uncertainties as employers held back on recruiting due to economic pressures.  

The International Monetary Fund (IMF) expects the UK economy to shrink by 0.3% this year. Since the end of 2022 the UK economy has remained largely stagnant. Rising wages will mean businesses might continue increasing prices, pushing inflation higher and prompting the BoE to continue hiking rates.  

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There has never been a more crucial time to take control of your finances than now. With inflation and the cost-of-living crisis biting into your disposable income, its getting tougher to manage your money.

Whether you’re trying to save for a rainy day or invest better, we bring to you the top stories that caught our eye from the internet this week, providing you with the best tips and expert guidance.

What’s happening in the housing market?

With the level of uncertainty in the housing market today, historically low stock and mortgage rates and rent payments soaring, it’s a confusing time for buyers, sellers and even the experts.

Arabella Youens, writing in The Telegraph, talks to property professionals, financial brokers and market commentators to ask key questions about the market’s behaviour, advice for first time buyers, mortgage renewals and future predictions for house prices.

In addition to the ‘Covid premium’ in the housing market and the cost-of-living crisis that the UK is facing, mortgage rates have shot up. Anyone who does not want to deal with uncertainty is withdrawing from purchasing too, leaving the market with less motivated buyers.

Experts still recommend purchasing now if you’re buying for the long term or have a mortgage offer with a 1-3% rate. For anyone with mortgages expiring soon, it’s not worth paying the penalty to get out early and fixing new rates with new lenders now.

Lock-in savings rates at 5%

Interest rates are on the rise as inflation rockets in the UK. With a slowdown in inflation, savings rates will not rise as high as expected, making right now the ideal time for savers to get the best deals.

Harvey Jones gives top tips for savers to lock in the best saving rates in the market today in The Express. The Savings Champion best buy table for five-year fixed-rate bonds shows that the top four pay 5% a year or more.

With Close Brothers Savings and United Trust Bank at the top spot with 5.05% and Tandem Bank and Secure Trust Bank with 5%, the landscape is looking much better for savers.

Previous year’s rates were around 2% and future rates are expected to fall. So, locking in now would be a “shrewd move” according to Anna Bowes, founder of savings rates tracker site Savings Champion.

Early Christmas shopping for Britain

A recent survey revealed that 30% consumers in Britain started their Christmas shopping and gift-buying before mid-October this year, up from 18% last year.

James Davey writes for Reuters, as inflation squeezes budgets and with the cost-of-living crisis not easing anytime soon, Britons are spreading their Christmas expenditure over several weeks.

NielsenIQ’s insights say that 27% Britons say they will buy Christmas gifts when they see them in store. They also found that British supermarkets’ sales growth increased on a value basis last month but fell in volumes.

Asda has come up to be the fastest growing supermarket of the big four (including Tesco, Sainsbury’s and Morrisons) with a sales growth of 7.6%.

If your budgets are stretched by inflation too, be sure to spread the cost of Christmas. Happy Holidays!

Photo by Heidi Fin on Unsplash

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