First of all, Happy New Year to you all, and happy February!

We have delayed sending out an update until we could see what was going to happen within the property market.

It’s been a very busy January, with a lot of properties coming onto the market, across the board. Viewing numbers have been strong, and sales are being agreed upon. So, it is not all the doom and gloom that the tabloids are making it out to be.

That being said, there are some patterns starting to emerge from buyers.

Buyers are being very cautious, and with yesterday’s announcement from the Bank of England increasing the interest rate to 4%, that is going to have another impact on their decision-making.  

For example, many buyers, whose mortgage offers were given a few months ago, are now very close to their offers running out in February or March, meaning if they cannot get a purchase over the line before they expire, they will need to reapply for their mortgage.  In most cases, they will no longer be able to afford the repayments at the higher mortgage rates and will have to withdraw from their purchases or renegotiate to account for their reduced affordability.  So, if you have a sale which is due to complete in the next month or so, it is imperative that you do all you can to get that across the line as, if your buyer or their buyers further down a chain have mortgage offers due to expire, the chain will most likely collapse if prices cannot be renegotiated.

The other thing we are hearing from buyers is that they are waiting for the predicted price crash.  They believe that if they hang on a bit longer, property prices will fall significantly (as the tabloids have said they would).  But we can see that prices are not falling at the rates originally predicted.  Although there is no denying that property prices are reducing, where they may have needed to all across the country, some areas are being hit much harder than others. This of course will have a knock-on effect across the board.  West Wales has always been more sheltered from dramatic price fluctuations than the rest of the country (much like any popular coastal region) so prices are not as likely to fall as much here as perhaps in other areas.

Finally, there are also buyers waiting to see what happens with the local council’s Council Tax on second homes,  (more on that below). The thought is that, if the councils increase their rates to the full 300% as they have the authority to do, more properties will come onto the market. This then gives buyers more choices, and also brings prices down as there will be more supply on the market. Again, we can’t tell if this will happen so it may not be wise to pin all your hopes on waiting for this.

All of this is making it a very interesting start to the year, which is probably set to continue until well into April.

Mind you, we don’t have a crystal ball, of course, so we can’t tell you exactly what the future holds.  This is just our take on what we are seeing, hearing, and also reading in the industry news (not tabloid news!)

CLICK HERE to read the latest industry updates on house prices

Updates on Council Tax Increases for Second Homes 

We have been speaking with the three local authorities in our areas over the past 6 months to try and understand what is happening so that we can update you all and keep you informed.  We can now report the following:

Carmarthenshire has told us that their council tax on second homes will not be increasing this coming tax year (2023/24), however, they will be serving notice on their residents this April to warn of a possible increase next year (2024/25). 

Meanwhile, both Ceredigion and Pembrokeshire have yet to make their final decisions on how much they will be increasing their council tax for second homes, with both having final meetings in early March and the announcement will most likely be on the next council tax bills received by residents in April.

This makes planning what you may want to do with your second home very difficult.  If you would like to discuss this further with us, please call us on (01239 562 500) or email us at info@cardiganbayproperties.co.uk.

CLICK HERE to read about Welsh Government’s new tax rules for second homes