Published: 03/03/2024
The second rush to the East Midlands, and specifically Lincolnshire for good reason, is upon us. The deeper pockets are buying and it looks to stay for a few more months. The first exodus was all down to Covid and the new trend of working from home. So why is there suddenly a second wave of wealthy buyers seeking homes in our local area? Simple... interest rates.
Before September 2022 and the (short) reign of Liz Truss, buyers in the East Midlands including Lincolnshire, Nottinghamshire and Leicestershire had enjoyed the opportunity to acquire a house at a loan rate of between 1.2% and 1.8%. Budgets were high, costs were low and the costs of living were not problematic. The same rates applied to all those buyers acquiring houses in London and the Home Counties. Movers took advantage of low rates, low costs and affordable prices. Southern buyers bought beautiful homes in and around London at for high prices (relative to Lincolnshire), but for low prices and the costs associated with running these large homes were low and attractive. Mortgage rates were fixed for three to five years and times were good.
Then things changed. Rates went up... hugely. New buyers went from an average of 1.5% to 6.5%. Those who have enjoyed low fixed rates for all these years are coming to the end of their fixed rates and even today, rates are triple what they were previously enjoying. At the time of writing, the average fixed rate is 4.5%.
Over the period of their low fixed rates, the cost of living has risen. Gas is more expensive, electricity is more expensive, oil and fuel is more expensive. But at least their mortgage repayments, one's biggest monthly outgoing, were low. However, either their fixed rate has now come to an end, or is due to go onto a variable rate imminently. So what are their options?
1. Pay it. Stretch to the monthly increase and tighten one's belt.
2. Sell. Stay down south and downsize to a cheaper, smaller house.
3. Move. Instead of compromising on size, continue to live in a big house and compromise not on size, but on location.
BOOM!! Therein lies the solution and the very reason for the huge increase in popularity of houses close to the A1 and both Grantham and Newark, where buyers in high paid jobs in London can commute once or twice a week to London in either 1hr or 1hr 15 mins respectively.
And so those fortunate local Lincolnshire sellers who have prominent homes, taking advantage of those local agents with London offices, are not only selling their homes... they’re selling them well! Actually, very well! These buyers from further afield are offering high prices (especially when comparing to prices where they're currently based) and are often in such an advantageous position that a mortgage is no longer a problem... quite simply, they don’t need one. The majority have enough equity from their sale that they can buy locally with cash. Lincolnshire sellers are cashing in.
So how can you take advantage? Simple, push your property under the noses of these wealthy buyers who are paying more than local buyers. Don't rely purely on a regional local agent and hope that these buyers see it on Rightmove. These buyers have no idea where they want to live and have no loyalty or preference as to which village they want to be in. They rely on a high-end service from more pro-active agents to point them in the right direction and guide them towards the good areas to buy, as well as where to avoid. It's how it works down south and they simply don't have the time to trawl the internet, it's an estate agents job to educate them on where the best villages are located, where the good schools are, where the best pubs are, where they walk the dog etc.