Boston Property Market:

Where are the Cash Buyers?

The UK property market has undergone significant shifts since the summer of 2020, driven primarily by the post lockdown race between the summer of 2020 and late 2021, and then a rapid series of interest rate hikes aimed at curbing inflation in 2022 and 2023. These changes have had far-reaching implications across the property market, influencing both prices and transaction volumes.

As we explore the nuances of these facts, it has become evident that while some anticipated trends (the property market was supposed to crash in Covid and again on the interest rate rises), this did not fully materialise. In fact, the property market has shown remarkable resilience under pressure.

The Interest Rate Surge and Its Impact

The initial wave of interest rate hikes began in November 2021, as the Bank of England sought to counter rising inflation, a process that continued until the summer of 2023. Over this period, interest rates were raised 14 times, culminating in a peak rate of 5.25%. The Bank of England's decision to implement such a rigorous monetary policy stemmed from concerns about the rapidly escalating cost of living, a consequence of both domestic and global economic pressures, including the significant disruption caused by Russia's invasion of Ukraine in February 2022.

However, the interest rate tide began to turn in August 2024 when the Bank cut rates slightly, to 5%, in response to improving inflation figures. This reduction, coupled with signs that further cuts could be on the horizon, has brought a sense of cautious optimism to the market. For the first time in many months, there is a glimmer of hope that the worst of the economic storm may be behind us.

So, let us look at house prices locally over the last 4 years.

Local Property Market House Prices in Boston Between 2020 and 2024

The average value of a property in Boston in July 2020, was £159,815. Today, according to the Land Registry, that now stands at £192,413, a rise of 20.4%. So, house prices in the Boston area as a whole haven’t dropped, despite the two predictions they would. So surely, it must be cash buyers that kept the Boston property market afloat, considering the huge increases in interest rates?

Cash Buyers: Not the Game-Changer We Expected

In analysing the performance of different segments of the British property market during this tumultuous period, one of the more surprising findings is the limited role that cash buyers have played. Traditionally, cash buyers are perceived as having a significant advantage in a high-interest-rate environment. Without the need for financing, they are insulated from the direct effects of rising borrowing costs, which should, in theory, allow them to dominate the market when mortgage rates soar. So, did the number of cash buyers rise when interest rates began to rise in 2022?

The proportion of UK home buyers with cash has indeed risen from the late 20%’s in 2020/21 to the early 30%’s in 2023/24.

As you can see it increased, yet it wasn’t an avalanche. Despite their financial advantages, cash buyers did not dramatically alter the dynamics of the market. Instead, the pace of the market continued to be set by those who rely on mortgages, even as the cost of borrowing increased substantially. This trend underscores the critical role that mortgaged buyers play in shaping market conditions.

Looking locally in Boston:

·         In 2020, 27.57% of UK home buyers were cash buyers, whilst in Boston, 37.9% of buyers were cash buyers.

·         In 2021, 28.06% of UK home buyers were cash buyers, whilst in Boston, 36.8% of buyers were cash buyers.

·         In 2022, 27.79% of UK home buyers were cash buyers, whilst in Boston, 31.4% of buyers were cash buyers.

·         In 2023, 32.94% of UK home buyers were cash buyers, whilst in Boston, 41.8% of buyers were cash buyers.

·         In 2024 YTD, 31.15% of UK home buyers were cash buyers, whilst in Boston, 39.3% of buyers were cash buyers.

 

Locally in Boston, we also saw a slight growth in cash buyers – yet again, nothing groundbreaking!

 

Mortgage Stress-Testing and Market Stability

So why were the doom mongers wrong about the property market crashing due to the vast increase in mortgage rates? This was down to the effectiveness of the Mortgage Market Review stress-testing rules introduced in 2014 for borrowers after the global financial crisis of 2008. These rules, designed to ensure that borrowers could withstand higher interest rates, have been instrumental in maintaining stability in the property market. Even as mortgage rates more than quadrupled from their lows, over three quarters of UK’s local authorities saw house prices increase between the spring of 2022 and the spring of 2024.

This stability is further evidenced by the relatively low levels of repossessions compared to the aftermath of the global financial crisis. In the 4 years after the global financial crash (2008 to 2011 inclusive), 113,374 UK were repossessed. In the Covid years of 2020 to 2023 inclusive, that number was 7,379 UK households.

Strong wage growth (average UK wages have risen from £31,487pa in 2020 to £35,828pa) and lender forbearance has also played vital roles in supporting borrowers during this challenging period.

These factors have collectively prevented the kind of widespread distress that many feared would occur as rates climbed.

Affordability and the Shift in Buyer Preferences

While house prices have remained robust in most areas, affordability has continued to be a significant concern for buyers, particularly in more expensive urban markets such as London. The pandemic-induced ‘race for space’ accelerated a trend where financially constrained buyers sought more affordable properties outside major cities. This migration from urban centres to more suburban or rural locations has been a defining characteristic of the property market over the past few years, and it appears to have gained further momentum as rates rose.

In more expensive locations, where the cost of living and property prices were already high, the increase in mortgage rates has made buying a home even more challenging for many. As a result, these areas have seen a shift in buyer demographics, with those less affected by higher rates—such as wealthier individuals or those moving from more affordable regions—continuing to purchase, while others have been priced out.

Sales Volumes vs. Prices: A Complex Relationship

As we evaluate the overall performance of the UK housing market, it's evident that while property prices have remained relatively strong, sales volumes did see a decline in 2023 compared to the surge witnessed in 2021. In 2021, transactions peaked at approximately 1.4 million, a significant increase compared to previous years. However, by 2023, this figure had decreased to around 1.02 million.

Despite the rise in interest rates during 2023, its transaction levels were consistent with long-term trends (there were an average 1.06 million transactions per year between 2008 and 2019). This stability highlights the resilience of the housing market. 2024 projections suggest that transactions may reach approximately 1.15 million, indicating a stable property market that continues to align closely with historical norms, even amid current economic conditions.

The persistence of strong prices, despite lower transaction volumes, suggests a degree of pent-up demand. If Boston buyers perceive that interest rates have stabilised or are beginning to decline, we could see a significant increase in transaction activity. This potential recovery is likely to be most pronounced in regions where affordability remains a key factor, and where the desire for more space continues to drive buyer behaviour.

Looking Ahead: A Pivotal Moment for the Boston Market

As we move forward, the UK property market appears to be at a crucial juncture. It is showing encouraging signs as we move through the latter half of 2024. With listings up by 7.2% year-to-date compared to pre-pandemic averages and gross sales 22% higher than the same time in 2023, the market is demonstrating resilience. Net sales have also surged, with a 28% increase compared to the same period last year, reflecting strong buyer activity. Additionally, the slight 2.6% rise in sale prices per square foot from January to July 2024 indicates a steady demand for property. These positive trends suggest a robust market outlook as we progress through the year.

Coupled with the recent rate cut, and better-than-expected inflation figures, this may signal the beginning of a more stable period. If financial markets are correct in predicting further rate cuts by the end of the year, we could see renewed confidence among buyers, leading to a more robust recovery in sales volumes.

However, it’s essential to recognise that the landscape has changed. The experience of the past four years has reinforced the importance of affordability, the resilience of stress-tested borrowers, and the critical role of mortgage buyers in setting market dynamics. As estate agents, understanding these shifts is crucial in navigating the evolving market and advising clients effectively.

As a Boston homeowner looking to sell, it's crucial to approach the market with a realistic mindset. With only 53% of properties that come onto the market successfully reaching a completed house sale and move, the odds of selling can feel like a flip of a coin, (12 months to 23^rd August 2024, of the 1,420,486 homes that left UK estate agents books, 798,886 homes exchanged and completed, and 710,620 homes withdrew unsold).

To ensure you're on the right side of that coin, it's vital to set a competitive price and present your property in the best possible light as this can significantly increase your chances of securing a sale and achieving your moving goals.

In Boston and similar towns and cities, where affordability and the search for space are particularly relevant, the insights gained from this period of upheaval will be invaluable. By staying attuned to these trends and anticipating the needs of our Boston clients, we can offer informed guidance in a time of change.

In conclusion, while the past four years have been challenging for the Boston and UK property market, they have also demonstrated its underlying strength and adaptability. As we potentially enter a more stable period, there is cause for cautious optimism. By understanding the factors that have shaped recent performance, we can better navigate the road ahead and continue to support our clients through whatever challenges and opportunities the future may hold.

If you would like to discuss anything about the Boston property market, please not hesitate to call us at the office.  01205 365500

2,946 Boston Landlords to be Hit by New Eco Rules in 2030

The rental property market is on the brink of a significant shift, one that will undoubtedly cause concern among landlords across the UK. The new Labour government has made clear its intention to raise the minimum energy performance standards for rental properties, a move that could have far-reaching implications for both landlords and tenants alike. The proposed change, which would see the minimum Energy Performance Certificate (EPC) rating for rental properties increase from E to C by 2030, has sparked a mix of anxiety and uncertainty within the property sector.

The new regulations are part of Labour’s broader commitment to combat climate change and enhance energy efficiency across the nation’s housing stock. Yet this step isn’t the first foray by a government into improving the energy efficiency of the U.K.’s private rental homes.

The Tory government first introduced EPC regulations for private rental properties in 2018 as part of a broader effort to improve the energy efficiency of the UK's housing stock. Under these regulations, landlords were required to ensure that their properties met a minimum EPC rating of E before they could be legally rented out. To support this, certain exemptions were allowed, and a cost cap was introduced, limiting the amount landlords were required to spend on energy efficiency improvements to £3,500 per property.

This cap was intended to prevent undue financial strain on landlords, particularly those with older or lower-value properties, while still encouraging necessary upgrades. The £3,500 cap covered a range of potential improvements, including insulation, heating system upgrades, and draught-proofing, and was seen as a balanced approach that allowed landlords to comply with the new standards without facing prohibitive costs.

The Scale of the Challenge for Boston Landlords

While the intentions of the Labour government are commendable, the practicalities for landlords are anything but straightforward. Upgrading a property’s energy efficiency from an E rating to a C rating is not merely a matter of a few minor tweaks like it was from taking a property from a G to an E rating; it often requires substantial investment. The reality of bringing a property up to a C rating could be vastly more expensive, with some projections placing the cost as high as £30,000 per property for older properties.

These figures are not just arbitrary; they reflect the significant work required to meet the new standards. From installing new insulation, upgrading heating systems, replacing windows, to potentially more extensive renovations depending on the property’s age and construction, the financial burden is considerable. For many Boston landlords, particularly those with older properties or properties where the value of rental homes are lower, the costs may seem prohibitive.

The Impact on the Boston Rental Market

The implications of these changes are likely to be profound. Some Boston landlords may decide that the cost of upgrading is simply too high and choose to sell their Boston properties instead. This exodus from the rental market could exacerbate the current housing shortage for tenants, driving up rents and making it even more difficult for those tenants to find affordable rental homes (although paradoxically, making buy-to-let more profitable for those that remain).

There is also the risk that the increased financial burden on landlords will be passed onto tenants in the form of higher rents. While the goal of improving energy efficiency is to reduce overall living costs for tenants by lowering their energy bills, this benefit could be offset if landlords raise rents to recoup their investment. This could particularly impact properties where rental incomes are lower, and the cost of upgrades represents a significant proportion of the property’s value.

Does Age, Tenure and Type of Home Make a Difference on the EPC Rating?

The EPC scores associated with each energy efficiency band are: 

·         Band A – 92 plus (most efficient)

·         Band B – 81 to 91

·         Band C – 69 to 80

·         Band D – 55 to 68

·         Band E – 39 to 54

·         Band F – 21 to 38

·         Band G – 1 to 20 (least efficient)

 

Looking at only the property type, it certainly affects energy efficiency.

 

Overall, “flats and maisonettes” are the most energy-efficient property type in the UK, with a median energy efficiency score of 73, which is equivalent to band C. Detached and terraced dwellings came in second at 66 while in last place was semi-detached (65).

 

Detached homes tend to be more modern, so should have a higher energy rating. There are three external walls exposed in semi-detached houses, which would make you think it would have better EPC ratings than a detached. However, the average age of UK semi-detached homes is older than the average age of UK detached homes. Finally, the terraced home normally only has two external walls, so should be better than semis and detached homes. Yet, terraced homes have solid walls, which make them perform not as well as cavity walls. Finally, flats and maisonettes, which are more likely to be more modern and grouped in blocks, making them more efficient.

 

Energy Efficiency Across the Different Property Types and Their Tenure

 

Breaking down each type into its three tenures of owner occupiers, private renting and social renting…

 

Detached properties exhibit relatively similar energy efficiency ratings across all tenures, with owner-occupied homes scoring an average of 64, slightly higher than the private rented sector at 62, with social rented properties at 66. This suggests that while there is a marginal variation, social rented detached homes tend to be more energy efficient on average.

 

Semi-detached homes show uniformity in energy efficiency for owner-occupied and private rented properties, both with an average rating of 63. Social rented semi-detached homes, however, are somewhat more efficient, with an average rating of 68. This may reflect better insulation or energy-saving measures in the social housing sector.

 

Terraced properties reveal a small increase in energy efficiency as we move from owner-occupied (63) to private rented (64) and then to social rented (69). This trend indicates that terraced homes in the social rented sector might benefit from recent energy efficiency upgrades or more rigorous building standards.

 

Finally, flats and maisonettes demonstrate the highest energy efficiency ratings across all property types, with owner-occupied and social rented homes both scoring 72, and private rented properties closely following at 70. The higher ratings in this category could be due to the structural benefits of multi-unit buildings, such as shared walls that reduce heat loss.

 

In summary, while there are differences in energy efficiency across different property types and tenures, social rented properties generally exhibit higher energy efficiency ratings, particularly in the semi-detached and terraced categories. This may reflect concerted efforts within the social housing sector to improve energy efficiency, possibly driven by policy initiatives and funding targeted at reducing fuel poverty.

Energy Efficiency by Property Age

Finally, I just wanted to look at the age of the property and see if there is any difference.

The age of a home is also a key determinant of its energy efficiency, largely due to advancements in construction techniques and regulations over time. Properties built from 2012 onwards tend to have the highest energy efficiency, with a median score of 84, aligning with EPC band B. Homes constructed between 1983 and 2011 also perform relatively well, with a median score of 72.

Older properties, particularly those built between 1930 and 1982, have a lower median energy efficiency score of 65. The least energy-efficient homes are those built before 1930, which have a median score of 59, placing them in band E.

The concentration of older properties in an area can significantly impact its overall energy efficiency ratings, with areas of Boston containing a higher proportion of pre-1930 homes typically showing lower median scores.

The Regional and Local Boston Picture

38.36% of UK private rented homes are in the proposed minimum EPC standards of A to C (compared to 36.28% in the East Midlands).

    Nationally, 59.46% of private rented homes are in the D & E EPC ratings at the moment, (compared to 61.85% in the East Midlands).

 There are 4,763 private rented properties in Boston, of which 2,946 are in EPC Bands D and E.

To visualise that better, I have created this heat map to show the extent of the issue for Boston landlords.

Boston Landlords Navigating the Uncertainty

In the face of these challenges, it is crucial for Boston landlords to adopt a pragmatic approach. While the initial reaction may be one of concern, it is important to consider the long-term benefits of making these energy efficiency improvements. Properties with higher EPC ratings are not only more attractive to tenants, who are increasingly looking for homes with lower running costs, but they also tend to have higher market values. By investing in upgrades now, landlords can not only comply with future regulations but also enhance the value of their investments.

Moreover, there may be opportunities to mitigate the costs. The government has yet to finalise the details of the new regulations, and there is hope that they will introduce measures to support landlords through this transition. For example, there has been discussion around increasing the cap on allowable expenditure for energy efficiency improvements, potentially up to £10,000. Additionally, there may be grants, loans, or tax incentives available to help offset some of the costs.

Boston landlords should also consider the timing of their investments. While the 2030 deadline may seem distant, the scale of the work required means that starting early could be beneficial. Properties that are upgraded sooner rather than later will be in a better position to attract and retain tenants, particularly as energy efficiency becomes an increasingly important consideration for renters. Furthermore, by acting now, landlords can avoid the rush and potential price increases that are likely to occur as the deadline approaches.

It is also worth considering the broader societal benefits of these changes. Improving the energy efficiency of rental properties is not just about meeting government regulations; it is about contributing to the fight against climate change and helping to reduce the country’s overall carbon footprint. This is something that both Boston landlords and tenants can take pride in, and it aligns with the growing demand for more sustainable living options.

Moreover, the improvements made to properties will not only benefit current Boston tenants but also increase the long-term viability of the rental market. As properties become more energy-efficient, they will be better equipped to withstand future changes in energy prices and regulations. This future-proofs investments and ensures that landlords can continue to offer quality housing in a competitive market.

Final Thoughts: A Strategic Approach for Boston Landlords

In conclusion, while the proposed changes to EPC requirements may initially seem daunting, they should be viewed as an opportunity rather than a threat. By taking a proactive and strategic approach, Boston landlords can not only meet the new standards but also enhance the value and appeal of their properties. This will not only benefit their own portfolios but also contribute to a more sustainable and resilient local rental market.

The key is to start planning now, seek out advice from agents like ourselves or many of the other agents in Boston, and consider the long-term benefits of these changes. The road ahead may be challenging, but with careful planning and a commitment to improving the quality of rental housing, Boston landlords can navigate this transition successfully.

As leaders in the property market, feel free to contact us to discuss what has been said in the article as it is everyone’s responsibility to not only meet these new standards but to embrace the positive changes they bring.

 

 

 

Boston Property Market 2024:              

A Strategic Guide for Buyers and Sellers

Are you a Boston homeowner? Are you thinking of moving home in the next six to twelve months? Whether you're aiming to buy your dream Boston home or sell a beloved property, grasping the current market dynamics is crucial.

You might be a Boston buy-to-let landlord, possibly looking at selling or buying another property to add to your portfolio?

Also, you could be a Boston first-time buyer and wondering if this is a good time to buy or not?

Irrespective of which of these you are, understanding whether the Boston property market favours buyers or sellers is crucial for making informed decisions.

By examining the local Boston property market, we can gauge current trends, prices, and opportunities, allowing all parties - buyers, sellers, investors, and first-time homeowners - to strategically plan their next moves.

What Sort of Boston Property Market are we in?

Those of you that regularly follow my Boston Property Market blogs, know the measurement of whether it's a buyers', balanced, or sellers' market is based on the proportion of properties marked as "Sold STC" and "Under Offer" compared with the total number of properties on the market.

For example, if there are 46 properties sold STC and 100 properties available/for sale, then 46, as a percentage of 100, is 46%.

This isn't just a numbers game; it's a gauge of market sentiment:

• Extreme Buyers' Market (0%-20%)
• Buyers' Market (21%-29%)
• Balanced Market (30%-40%)
• Sellers' Market (41%-49%)
• Hot Sellers' Market (50%-59%)
• Extreme Sellers' Market (60%+)

The significance of these brackets can't be overstated. They directly impact everything from listing prices to negotiation leverage.

Current Boston Property Market Snapshot

To calculate Boston's property market's status, let's incorporate our most recent findings for July 2024. The numbers and statistics have been taken from the website 'The Advisory,' which has calculated the market state for many years. I am sharing them from the summer of 2018 to July 2024.

·         The Boston postcode district of PE21 showed an extreme sellers’ market at 71% in the summer of 2021, which eased off throughout 2022.

 

·         Throughout 2023, the Boston property market was in the high 30%/low 40% ranges (a balanced/sellers’ market). As expected, due to the seasonal nature of the property market, by January 2024 this had reduced slightly to 38%.

 

·         Since January 2024, it has increased slightly, and now stands at 39%.

The Consequences and Thoughts for Boston's Property Market

This new data prompts me to take stock and ponder.

For Boston sellers: We are now in a property market where sellers must be more strategic, flexible, and patient. You should brace yourself for your home to be on the market for longer, with an extended marketing period. Realistic pricing is more vital than ever. Setting the right price is crucial for attracting suitable buyers.

For all the Boston homes that left estate agent books in the 12 months between July 2022 and June 2023, 60.51% of Boston homes sold and completed (the rest withdrawing, unsold). Since 1st January 2024, that figure for Boston homes has increased very slightly to 62.40%.

(Just for comparison, for all the homes that left estate agent books in the 12 months between July 2022 and June 2023, 58.67% of UK homes on the market sold and completed. Since 1st January 2024, that figure for UK homes has also dropped to 51.13%).

Therefore, your marketing strategy is just as important. Employing tools such as video or virtual tours, targeted social media campaigns, or interactive property listings could be particularly beneficial in this more ‘normal’ market of 2024.

For Boston buyers: Expect intense competition if you're interested in highly sought-after types of properties. Securing mortgage pre-approval can put you ahead of other prospective buyers. Consider expanding your search area to discover potential deals that others may overlook. Conversely, in less competitive markets, Boston buyers have more leverage to negotiate from the offer price to inclusions like carpets, fixtures, and fittings. You will also have the luxury of choice and time with other homes.

Remember, four out of five sellers are also buyers, so what you may lose on the sale might be compensated for on the purchase. External influences such as global economic trends, inflation, and interest rate repercussions could all cast shadows on the Boston property market.

Final Thoughts

As we progress into the eighth month of 2024, the Boston property market presents challenges and opportunities for buyers and sellers.

Understanding these market subtleties is crucial for anyone considering a move, from existing homeowners to seasoned buy-to-let investors, first-time buyers, or those looking to relocate to Boston.

Stay flexible, stay informed, and remember that your home-moving experience is as much about the journey as the destination.

What are your thoughts on Boston's developing property market since we have a new Government?

Do you anticipate any other shifts or trends in the Boston property market?

What are your local insights and experiences?

Please do share them.

 

 

Why Are So Many Boston Homeowners Selling So Soon After Buying?

The UK property market has seen significant shifts in recent years, particularly during the pandemic.

One of those changes discussed by the Press are the number of properties for sale where the home seller is suffering from ‘buyers regret’. In estate and letting agency online forums, the ‘feeling’ is that there are a lot of properties on the market, where the owner purchased their home during the pandemic years of 2020 and 2021 yet are now back on the market.

There are 694,281 properties currently for sale in the UK and for 8.2% of them, the owner has only been in their home since the end of the lockdown.

This article will calculate the percentage for Boston (as the numbers are much smaller and more interesting to Boston people), the reasons behind this trend and its implications for the local housing market.

The Post-Lockdown Buying Frenzy in Boston

The pandemic brought unprecedented changes in the British property market. After the first lockdown in spring/early summer 2020, remote working became the norm, and many people re-evaluated their living situation. The desire for more indoor and outdoor space became a priority. This led to a surge in property purchases, particularly in suburban and rural areas. Buyers were eager to escape the confines of inner-city life, seeking more spacious and comfortable homes.

To give you an idea of the numbers, the average number of UK homes sold (including new homes) since 2005 has been 1,169,864 per year (or 292,466 per quarter). Yet, the average quarterly number of UK house sales in the 12 months between Oct 2020 and Sept 2021 was considerably more at 1,553,860 (or 388,465 per quarter).

However, this buying frenzy was driven not just by lifestyle changes but also by favourable economic conditions. Low interest rates and government incentives, such as the stamp duty holiday, made buying a property more attractive than ever. Many people took advantage of these conditions, leading to a boom in property sales.

So, how often do people move home?

 

Traditionally, homeowners in the UK tend to stay in their properties for a significant length of time. There are 17,693,200 owner-occupied homes in the UK, and in 2023, a total of 1,023,500 (1.02 million) homes were sold.

This 1.02 million figure includes 231,000 new homes, leaving 790,500 sales of existing (second-hand) homes. This is significant because it means that only 4.48% of existing owner-occupiers moved home in 2023, implying that, on average, existing homeowners move every 22 years and 17 weeks.

With this information, one would expect the number of homeowners looking to move so soon after buying their home to be relatively small. Therefore, we decided to analyse the properties for sale in Boston and see if the statistics match the anecdotal suggestions.

There are 354 properties currently for sale in the Boston area.

Out of these, 41 properties were purchased during the pandemic years of 2020/21.

The breakdown of these properties is as follows:

 

·         Detached Boston houses: 15

·         Semi-detached Boston houses: 11

·         Terraced Boston houses: 9

·         Boston Apartments: 0

·         Boston Bungalows: 6

 

This raises the question:

 

Why are 8.2% of UK (or 11.6% of Boston) homeowners looking to sell so soon after buying?

 

Several factors could be contributing to this trend:

1. Overestimating the Appeal of Suburban/Rural Living: During the pandemic, moving to a more suburban/rural setting like Boston might have seemed idyllic. However, the reality of suburban/rural living - such as longer commutes, fewer amenities, and a different pace of life - might not have lived up to expectations for some homeowners. As a result, they are now looking to move again.

2.      Changes in Work Arrangements: While remote working was widely adopted during the pandemic, many companies are now calling employees back to the office, at least part-time. This shift can make living in more remote areas less practical, prompting homeowners to relocate closer to their workplaces.

3. Economic Pressures: The financial landscape has also changed since the height of the pandemic. Rising interest rates will make homeownership less affordable for some people, leading them to sell their properties sooner than planned.
4. Market Opportunities: The current property market might allow Boston homeowners to make a profit. With Boston property values having increased over the past few years, some owners might be looking to capitalise on this and sell their homes at a higher price.

Implications for the Boston Property Market

This higher-than-normal number of properties selling so soon after moving in will undoubtedly increase the number of homes for sale.

The average number of properties for sale in the UK in May 2017 was 568,845; in May 2018, it was 660,019; and in May 2019, it was 667,532 (an overall average of 632,132 for three years combined). In May 2024, it was 694,281 (as mentioned in the introduction).

This increase in the supply of homes for sale means Boston house sellers need to be realistic with their asking prices, as the competition is greater.

To back up the idea that realistic pricing is vital if you want to move home, only 53 out of every 100 properties leaving UK estate agents' books since January 2024 have been sold, exchanged and completed, while the other 47% have come off the market unsold.

Moreover, this trend could signal a shift in how people view homeownership post-pandemic. The rush to buy during the pandemic might have been more about immediate needs and desires than long-term plans. As the world returns to normalcy, people's housing preferences and requirements will likely evolve, leading to more dynamic movements in the property market.

Final thoughts -

The trend of pandemic-era homebuyers in Boston putting their properties back on the market highlights the fluid nature of the current property market. While the reasons for this trend are varied and complex, it reflects broader changes in how we live and work. As the property market continues to adjust to post-pandemic realities, buyers and sellers in Boston must stay informed and adaptable to navigate these changes successfully. One option to stay informed is to follow our agency on social media for more articles like this.

If you are considering moving soon after buying your Boston forever home only a few years ago and would like to discuss your options without any obligation, then let's have a chat.

 Why Hasn’t the Boston Property

Market Crashed?

The UK property market has demonstrated remarkable resilience despite facing significant challenges over the

past 18 months. Many analysts in the autumn of 2022 predicted a severe downturn in house prices, driven by

economic uncertainty, a cost-of-living crisis, and rising mortgage rates.

Yet, contrary to these grim forecasts, UK (and Boston) house prices have remained relatively stable. This

article delves into the reasons behind the unexpected stability of the property market, providing insights for

buy-to-let landlords and homeowners alike.

Economic Predictions vs Reality

In the autumn of 2022, following the controversial Liz Truss and Kwasi Kwarteng mini budget, there were

widespread predictions of a dramatic fall in UK house prices. Some forecasts suggested a potential decline of

between 20% and 35%. However, these predictions have yet to materialise. While there has been a slight drop

in prices since their peak in autumn 2022, the decrease has been modest, with official Land Registry figures

indicating a fall of about 3.12% in UK house prices in the last 18 months.

Yet if we look at the last 12 months, British house prices according to the Land Registry were 0.89% higher in

April 2024 than April 2023. Yet the issue with Land Registry data is that by its very definition, it is 6 to 8

months out of date, as it measures house prices agreed 6 to 8 months before that data is published.

Data from Denton House Research using live real time data of £/sq.ft sales agreed statistics indicate UK house

prices on the 97k sale agreed homes in May 2024 stood at £348/sq.ft.

For comparison, in April 2024 it was £344/sq.ft, in March 2024 and February 2024 it was £339/sq.ft and in

January 2024 it was £331/sq.ft, a rise of 5.13% since the New Year.

This resilience raises the question: Why were the forecasts so inaccurate?

Improved Lending Practices

One significant factor that has helped stabilise the property market is the improvement in lending practices.

During previous housing market downturns, banks often came under fire for poor lending standards. However,

changes to mortgage regulations in 2014 with the Mortgage Market Review (MMR) have made a considerable

difference this time. These regulations require banks to ensure borrowers can afford their monthly

repayments even if mortgage rates increase significantly. This precaution has provided a substantial buffer for

homeowners, enabling them to cope with rising rates.

For instance, in 2007, shortly before the global financial crisis, many borrowers did not need to prove their

income to their banks. The 2014 MMR changes addressed this issue, ensuring that lending was based on

sound financial footing. Consequently, many homeowners could afford higher mortgage payments when their

mortgage rates increased recently.

Employment and Wage Growth

Another crucial element has been the relatively stable employment situation. Although the UK experienced a

brief recession over this last winter, unemployment rates have remained low at 4.3%, compared to 8.5%

during the 2008 global financial crisis. Moreover, average wages (including bonuses) have increased by 5.7%

over the past year, reaching their record-high level of £682 per week.

This combination of low unemployment and rising wages means that fewer homeowners have been forced to

sell their properties due to financial difficulties. Even those facing financial challenges have found support

from proactive banks, which have offered solutions such as interest-only payments or extended mortgage

terms to help them manage their repayments.

Supply and Demand Property Market Dynamics

The impact of economic challenges on the property market has been more evident in transaction volumes

than in prices. Typically, there are about 1.16 million house sale completions annually in the UK. However, this

number surged to 1.48 million in 2021 due to the lockdown inducing ‘race-for-space’. It then dropped to 1.26

million in 2022 and further to 1.02 million last year.

While demand has decreased because of higher mortgage costs, supply has also reduced as potential sellers

have chosen to wait for better market conditions.

There was an 11.5% increase in net house sales in the first five months of 2024 compared to the first five

months of 2023 (400,697 UK net house sales YTD to 26th May 2024 vs 359,523 UK net house sales), but only a

9.9% rise in new homes coming to the market (745,715 UK listings YTD to 26th May 2024 vs 678,845 UK

listings).

First-Time Buyers and the Rental Market

First-time buyers have been particularly affected by rising mortgage rates, as they typically need to borrow a

larger proportion of their homes value. Despite this, they have been more active than expected, partly due to

the rapid rise in rental prices. High rental costs have motivated many to purchase homes, often with financial

help from their families. Data from the English Housing Survey revealed that just over 11 out of 30 first-time

buyers received financial gifts from their families in the past year, up from 8 out of 30 in 2022. This support

has played a vital role in maintaining activity in the housing market.

Boston Property Market

So how is all this affecting the Boston property market? One measure is judging what people are paying for

Boston homes.

Looking at the monthly exchange of contracts data, the average price paid from May 2019 to

April 2020 for a Boston home (PE21) was £155,135. The average price paid in the last year

(June 2023 to May 2024), has been £188,960, a growth of 21.8%.

Now, it is important to stress, this does not mean Boston house prices have risen by 21.8%, just the average

price paid between the two 12-month periods has changed. Over the coming weeks and months, we will be

analysing the £/sq.ft data for Boston and reporting back in the Boston Property Blog.

Outlook for House Prices

Eighteen months ago, economists almost unanimously predicted a decline in house prices. Now, many are

forecasting growth. Estimates vary, with some predicting a 4% increase, although this might be optimistic.

Other estimates suggest a 3% rise, while some analysts expect prices to remain broadly flat this year due to

stretched affordability, especially for first-time buyers.

The UK property market has shown an impressive ability to weather economic storms, thanks to sound

lending practices, stable employment, rising wages, and family support for first-time buyers. Whilst

transaction volumes have taken a hit from the heady days of 2021 and the long-term average, this has meant,

along with the other factors mentioned in the article, house prices have remained more stable than many

predicted.

If you are wondering about the general election’s effect on the property market, it is our belief it will have

hardly any effect on the medium-term direction of the property market (on the assumption neither of the main

parties have any ‘creative and wacky’ policies not yet published at the time of writing this article).

So, as we progress into the second part of 2024 and beyond, the property markets resilience will continue to

be tested, but the foundations laid in recent years provide a solid base for navigating future challenges.