Francesca Baker-Brooker is feeling very frustrated.
Two months ago, she agreed a sale on her two-bedroom flat in Shoreditch, London, for £415,000 – around £10,000 below the asking price.
With the proceeds, Francesca, 38, and her husband Andy want to buy a bigger property, which they hope will become their “forever home”.
Everything was going well until last week, when the buyers said they didn’t want a survey. On Monday, they pulled out due to “changed circumstances”.
A lot has happened since Francesca agreed her sale.
The conflict in the Middle East started a month later and has escalated, sending fuel prices and inflation expectations upwards, and mortgage rates with them.
The property market has struggled in response, with house-hunter enquiries down 13 per cent year on year, according to property portal Zoopla.
Francesca, who works in PR, says she is concerned as to how she may be affected.
“I’m very worried. It feels like the longer this goes on there’s less chance of getting a reasonable price for it,” she says.
“We’re lucky that we love our flat, and if we have to stay there it’s not the end of the world,” she adds.
“But we’re very frustrated at the buyer. It’s a big agreement to just pull out of suddenly and affects other people.”
“Those sellers have been quite pushy so we’ve sunk survey and solicitors and mortgage fees – and a lot of time and energy.”
She also has a cheap mortgage fix of her own – at a rate of 1.2 per cent – expiring this September, and would ideally like to move before this ends.
Francesca has quickly got the property back on the market and has viewings lined up, so she’s hopeful she can agree a new sale.
But with mortgage rates rising in recent weeks, potential buyers are likely to find that borrowing for a mortgage is more expensive than they expected, which may result in some finding they can offer less.
According to Moneyfacts.com, the average two-year fix has risen from 4.83 per cent at the start of March to 5.84 per cent on Tuesday. This is the highest level since July 2024.
Meanwhile, the average five-year fix is 5.76 per cent – up from 4.95 per cent at the start of March.
Experts say that property sales that are already agreed are unlikely to be affected on the whole, as lenders tend to honour deals for several months, but new buyers may be adjusting expectations.
Nick Mendes, a broker at John Charcol, said: “For buyers who already have a mortgage offer, their rate is usually locked in for the offer period, typically three to six months.
“The pressure is more likely to build over the next few months where purchases are delayed and offers start to expire, at which point some buyers may need an extension or move onto to the current rate available with the lender.”
Other experts say some buyers are already adjusting their expectations and plans.
“On the ground, we are seeing buyers pause to rework their budgets rather than abandon purchases,” said Paul Stringer, director at brokerage Norton Finance.
Housing market experts say those who are trying to sell in the current climate and want to ensure a sale is agreed should ensure their pricing is correct
Richard Donnell, executive director at Zoopla, told The i Paper: “Homes are still selling, but pricing and presentation matter more. This depends on where your home sits in the market.
“Getting good advice from an agent is key. Sales activity isn’t slowing but it’s becoming more selective and increasingly reliant on a smaller pool of committed buyers.
“For buyers, market trends mean less competition and more choice but tighter affordability if not mortgage rate is locked in.”
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