Another day, another report to highlight the slowdown in the housing market, with the latest RICS UK Residential Market Survey showing that property enquiries, instructions to sell and subsequent sales all declined during May.
This follows yesterday's House Price Index from Halifax, which revealed that the rate of annual house price growth edged down further to 3.3%, and that prices actually fell over the past three months, down by 0.2% for the second consecutive quarter. So what does this mean if you're a homeowner?
Hopefully, not too much, but it can't be denied that the possibility of price falls has left people rattled. Some are predicting just that in the near-term – at least according to RICS – and although prices are expected to recover thereafter, it'll understandably concern those with a significant mortgage balance and limited equity.
Much of the latest slowdown is thought to be due to uncertainty over today's election, according to housing surveyors questioned by RICS, with it causing both buyers and sellers to pause for breath while they await the outcome – and its potential implications.
If you're concerned about the market, there are things you can do to shore up your finances, and one of the best options could be to overpay your mortgage. In doing so you'll be reducing your mortgage balance and adding valuable equity, so in the unlikely event that your house price dropped, you wouldn't be left in a situation where you had negative equity and were trapped in an expensive mortgage.
You'll want to make sure you've got the best possible mortgage rate, too, and if you're coming to the end of a fixed rate deal, now's the perfect time to see what else is out there. Average rates are continuing to fall, particularly in the long-term sector of the market, giving you the chance to lock into record low repayments and keep your budget under control for five or even 10 years.
Then you'll want to take a look at your wider finances, making sure you've got a suitable financial buffer should anything unexpected happen. Unfortunately, the typical Brit only has enough savings to last for 32 days, so don't be one of them! Find the best savings rates and squirrel away as much as you can.
You may even want to consider offsetting your savings against your mortgage, which can be another great way to reduce your repayments or even clear your mortgage sooner, and with offset rates at record lows, now could be the ideal time to speak to your lender.
Whatever you do, don't worry too much – economists generally predict house prices will remain heightened, no matter what the result of today's election, and with Halifax putting the average house price at £220,706, there shouldn't be too much cause for concern. Just make sure you've got your finances organised, and hopefully, the housing market slowdown won't have too much of an impact on your household.
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