Are high interest rates affecting your plans to move house?

[Homestead2]

Are the high interest rates putting you off moving house?

My house went on the market yesterday, we were pre-warned it’s a buyer’s market but we have 8 confirmed booking for this week. The market doesn’t seem to have slowed down. I am now looking at bigger properties at a higher price point and wondering whether those are impacted more but they are still priced very high. Even more so than Covid prices!

That’s very different to the experiences in my area. Houses of whatever size, are only selling when they are competitively priced.

Yes, my experience is the same as Buscobel
It’s not unusual to get lots of viewers round when you first go on the market. Hopefully a few will be serious buyers.
And houses are being priced high, whether or not they actually sell at that price is another thing.
Rightmove is only showing sales for Jan/Feb at the moment so we can’t really know yet how 2026 will pan out.
Good luck with your viewings!!

Another two viewings booked. We shall see how many are serious. I have kept an eye on houses in our area and all of them have sold within a week!

It’s all well and good selling but I am having doubts about buying something bigger with 4.5% interest rates being the norm right now!

I suggest you think more about what if interest rates climb to 6-7% in the next few years

Definitely! I think it will push me into buying a slightly smaller/ less expensive home which is a bit annoying as the stamp duty and fees are bloody crazy too.

Interest rates are not high. They have been historically low for some time, which I believe had led people to think current interest rates are high. They where around 5% when we first bought 25 years ago and that was relatively low at that point. We stress tested our funiances for at lest 10% (ie made sure we would still be able to afford everything). Looking back 5% is relatively low compared to historic interest rates.

Absolutely get your point but for the last 10 years my mortgage has been under 2% so what is normal for me and what is normal historically are two different things. That coupled with the sheer demand for houses in our area means that most people buying here are not local. It’s a bit of a mess!

Our house is in the higher bracket , put it up for sale a week ago and have had only one viewing

That’s really tough! I hope you find a buyer soon. Did you EA give you any feedback?

I have had the whole “it’s a buyers market” discussion and been given quite a detailed narrative around what houses in the area are selling for, timescales and what to expect etc.

Why have you then got your house on the market? You don’t seem to be a serious seller/buyer as you are questioning interest rates and houses still being expensive.

Another who does not think that 4.5% interest rates are high

Same here. 4.5% is nothing crazily high. Sensible and prudent to stress test your own ability to keep the mortgage covered as @MigGirlsays. Prices in my area are falling and quite fast. Houses are either staying on for months and months, unless they reduce by 20%. The lower price point properties of what is available locally are the one moving faster as well, so anything over 400k sits on Rightmove unless it’s priced realistically

I have to have mine on the market before I can view any other property. I suppose the difference being when I bought my house 10 years ago, house prices were very reasonable! That isn’t the case anymore. It’s become a crazily expensive place to live and salaries have not kept up to speed with that level of increase. My house has tripled in value and then some.

This is really interesting! I haven’t seen any decline here whatsoever. The properties I want to view are in the £800-1million bracket and will not allow me to view until my house is under offer.

I don’t understand your question OP. 4.5% is not high, the rate has just been artificially low for some time.

If your house has tripled in value as you state, then of course the other houses will have increased significantly too 🤷🏻‍♀️

OP not being allowed to view without being under offer is ridiculous. You might not find anything and you'll still have £20k+ in estate agents fees, removal and solicitors. Our estate agents vary but it's usually you have to be on the market. Some don't allow offers without your funds in place or a sale proceeding through solicitors.
I finally got to see a cottage last week and it was an absolute dog. Perhaps that's why it hadn't sold! You're lucky to have viewings, We've had few over the last few weeks. However all grumbling about mortgage rates.

We had around 60 viewings on our flat and went through 4 buys before getting to exchange/completion. Some fell away because they didn't have the money despite claiming to (EAs do little DD) and at least 2 others dropped out after being advised from friends or their solicitor to avoid a leasehold. Good luck in your sales proceeds but even in sought after locations flats are really struggling at the moment.

4.5% is high to someone who’s entire adult life has been paying under 2%. It’s not so much the interest, it’s the value of property sky rocketing which isn’t matching with income.

The person who bought my house before me paid £600, and the average salary in that same year was approximately £200 so say only one of them worked which would have fit that era. Average mortgage rates were 4.76-5% so let’s call it 5% and typical term was 25 years. With a 10% deposit, £3.15 a month or £38 a year. 19% gross salary.

Let’s compare that to average figures today. Average semi-detached house is about £274k. Median f/t salary is £39k, typical mortgage rates 5-5.75%. Same term at 25 years and same 10% deposit - it’s £1500-1520pcm (18k p/y and 46% of gross pay).

Gosh, that is awful. I hope you don’t mind me saying but I would never buy a flat. I have seen so many issues with freehold/ leasehold, management fees. Bad neighbours are even worse when they party above you, etc.

We don’t really have flats in our area but I do sympathise with you.

I know that, but people are just pointing out to you that you could take on a larger mortgage, then the rates could increase, as 4.5% is actually not that high compared to where they have been in the past. Base rate was 10% in the early 90’s (15% in the early 80’s). With a larger mortgage due to the higher prices of houses, it only takes 1 or 2% to make things totally impossible for people.

These things are always cyclical so you can’t rely on maintaining the current status quo.

It is so frustrating! Add in the complication of moving animals (likely both us and the seller) and timings become even more important.

First viewing offered full asking so has sold in less than 2 days! We put in on the market for above the EA’s estimate too.

Now to find something ASAP myself before I end up in a caravan in my parents’ garden.

That's great, OP. Hope the same happens to us when we put ours on next week : )

Exactly, the "Ten Year Yield" is the thing to watch.

https://news.sky.com/story/uk-borrowing-costs-hit-decades-long-high-as-pressure-mounts-on-starmer-13542996

The price of property has skyrocketed (due to years of cheap mortgage debt) not the value, the value is what someone is prepared/able to pay/borrow now and in the future, the "value" of a house can drop very quickly with the right market conditions.