Spring has sprung

While I’m not about to burst into a verse or two of ‘You make me feel so young’, the second line of that song, ‘You make me feel so Spring has sprung’ is relevant, at least in terms of the season we are now fully immersed in.

As the sun becomes more of a permanent fixture, the housing and mortgage markets tend to come into a more fuller bloom, and that greater level of activity and demand which we are normally accustomed to, does seem to be making itself known again in 2023.

The statistics for the last few months might well testify to this improvement in outlook. The last figures we have on residential property transactions are for March, however they do show some improved and positive intent.

HMRC revealed at the end of April that March’s figures had hit 94,870 – a significant 26% up on the previous month, albeit 14% lower than a year ago.

Given that the early part of 2022 feels like a whole generation ago, let alone 12 months, I think we can all be satisfied with the recent improvement, albeit with some incredibly challenging times gone by, and no doubt, with some more to come.

However, that increase (in my opinion) should be improved upon with future figures, particularly during a Spring and Summer period which does tend to deliver high activity watermarks in most ‘traditional’ years.

Whether 2023 will be a ‘traditional’ year remains of course to be seen, but via our business interactions and activity – and via anecdotal feedback – I am seeing a noticeable uptick in both adviser positivity and buyer demand.

As mentioned, Spring/Summer months tend to be busier, but at the same time we have to be wary of what mortgage pricing is doing, and how increased affordability challenges might continue to play a part in terms of what prospective buyers and movers are able to achieve.

It’s worth noting of course, the very different interest rate environment we currently sit in compared to 12 months ago, and even though product rates have ‘baked in’ ongoing rises in Bank Base Rate, they are clearly not at the same level prospective purchasers were able to access in the first half of 2022.

As I write we are not that far away from the publication of the latest inflation figures – the mood music coming out of the Bank of England is that we’ll see some noticeable falls in inflation in the coming months, and in terms of putting a halt to any short-term increases to BBR, the Bank’s MPC is certainly going to need to see this in full effect.

To say that inflation has been ‘sticky’ would be an understatement. Currently, over double figures, I’ve read recently of the next figure being more likely to be in the area of 9%, which is clearly a drop but perhaps not the incredible drop we have all been led to expect.

There will perhaps be some furrowed brows in Government if the falls are not as dramatic as they were apparently meant to be, given that one of Rishi Sunak’s five key pledges is to halve inflation by the end of the year. At the moment, that does look touch and go, if not completely out of reach.

And, of course, if the fall is anything less than the market is anticipating or the Bank of England feels is credible, then I think we can all expect BBR to be raised again. Not that I have found many people who believe this approach is actually working that well – but that is perhaps an article for another time.

Overall, therefore, demand for purchasing does appear to be inching up, and it is likely to be these coming months where we will see just how much it has bounced off the bottom.

Again, I’m hearing good things from advisers – and our instruction numbers appear to back this up - so it certainly makes sense for all firms to take advantage of any increase in purchase activity and make sure they cover off the needs of all clients, in areas such as conveyancing, but also protection, GI, and the like.

Given that most people will only purchase a home two to three times, then it will be obvious to all, just how important purchasers are to advisers when they ‘come through the doors’ and by servicing their entire needs, you’ll have a much better chance of keeping them as clients for the duration of their (and your) life.