Stirling Ackroyd’s view on the Cost-of-Living Crisis.
The cost-of-living crisis is firmly with us. Expertly forecast by our analysts some months ago, the financial spectre has materialised as a concern for all. But while it might feel like an impossible predicament, one thing is for sure – it will not last forever.
“Solutions will be found to restore the stability of the lives that we lead, meaning that the current crisis is likely to come to an end in months plural, rather than years,” Karl Le Brasse Managing Director of Stirling Ackroyd Sales predicts.
“The property industry knows how to navigate a crisis. We demonstrated that during 2008 and onwards – and again in the pandemic. The difference now is that our current problems are made up of far more left-field factors such as war and energy prices. So for now, we just have to adjust to market conditions, and guide our customers – new and old – using our extensive forecasting abilities and experience.”
Average rents have also increased by 7.1% in a year.
The Challenge – Explained
The combination of supply chain disruption, a global energy crunch exaggerated by the war in Ukraine, market inflation, rapidly rising rents, limited property supply fuelling record (though now stabilising) property prices, and higher interest rates have created an unprecedented cost of living crisis. This is predictably chilling rather than cooling the UK property market’s confidence.
Careful next steps need to be taken by the powers-that-be to resolve a crisis that influencers like Martin Lewis, Money Savings Expert’s founder, are saying is a “pandemic-scale national crisis.” More news on this is expected in the coming days as the UK’s Prime Ministers in the wings, and a host of government advisors and fiscal experts, consider optimal next steps to ease Britain’s householder’s ever-growing financial burdens.
A Pocket Punch not a Pinch
“Energy bills and in-pocket disposable income is a major decision-factor when it comes to changing homes,” Karl, continues. “Real disposable household income is a good measure of the cost of living, and affordability is now everything.
“What is new to the market is just how far contingency and savings provide the necessary comfort factor for almost all significant transactions, not just property. “That is why we are seeing what we regard as a temporary change in market trends. Those that are well-funded, ready to make cash purchases, or have a cash reserve plus a low loan-to-value mortgage, really are in the driving seat in the months ahead. Prices have already begun to stabilise, which is no bad thing. So there are going to be good deals to be had for buyers that are essentially ready-to-go.”
If you are looking to sell you property or buy a new home in the months ahead, click here to speak to Stirling Ackroyd.