For a few months now – ever since the infamous Truss/Kwarteng ‘mini budget’ last September, – housebuyers have been faced with increased costs on mortgages and have also been a bit nervous they might be purchasing in a weakening housing market. You couldn’t blame them when the media at the end of 2022 were full of negative reports and predictions for house prices in 2023. Prices slipped in some areas as interest rates have risen, – its only to be expected.

But locally it’s been more a case of prices flatlining rather than dropping. In fact in the last 3 or 4 weeks, its felt like we’ve been heading back to more active market conditions. Viewings and offers are up, and whilst its not as frantic as it was in the super-busy market of 2021 and early 2022, there’s definitely signs buyers are thinking we may be at or near the top of the rising interest rate cycle and if they want a good property in this area they can’t wait around hoping for a fall in house prices that might not happen. A week ago for example we marketed a house in Arlington Road at £1.4million and had a big response, lots of viewings and 7 competing bidders, most of whom went over the asking price. This weekend just gone we had two big viewing days at Netheravon Rd in Chiswick asking £1.5million (for a 3 bedroom house needing renovation!) We often find our market can be a bit slow to get going in January and February but then often as Spring approaches and thoughts start to look ahead to the next school year, its surprising how a dormant looking market can suddenly spring into bloom.  Despite higher mortgage rates and other bad news, the market has been looking a lot more resilient than some people thought.

And yet, and yet….we’ve now had the curveball of two bank failures in the US and a big wobble for Credit Suisse in Europe. There’s nothing spooks financial markets more than institutions running out of capital to meet their obligations, with all the attendant memories from the Great Financial Crisis in 2008. Its too early to know how this will pan out in the general economy. Its almost certainly a symptom of Central Banks taking liquidity out of the system (Quantitative Tightening rather than Quantitative Easing) and financial institutions having to reorientate their modus operandi in the light of a higher interest rate environment after years of cheap money. The US banks in particular were actually following policies that looked prudent, but became risky because conditions changed. Whether this is a blip on the way back to more normal interest rates or whether some banks, some companies and some households with finances based on cheap money can’t cope with a less liquid financial world, – well that’s the big question.