Why negative stories dominate the news cycle
The bond yield story is a good example. This week, the yield on 10-year UK government gilts touched 5.19% – the highest level since July 2008.
That is a significant number, and it is entirely legitimate news. Rising gilt yields push up the swap rates that lenders use to price fixed-rate mortgages. If they stay elevated, borrowing costs will follow. The story is real.
But there is certainly more to it. Gilt yields are a macro-financial indicator, realistically written for an audience of investors, pension fund managers, and economists. They measure the cost of government borrowing and sentiment about UK fiscal policy. They are not truly a measure of whether a family in Oxford can sell their three-bedroom semi-detached home this spring and move before their eldest heads to high school in September.
Financial journalism is drawn to warning signals because its primary readership responds to risk. Property journalism aimed at homeowners and buyers should, by contrast, be asking: what does this mean for transactions that are actually happening now, in real places, involving real people? The two perspectives produce very different articles.
But that doesn’t stop property journalists looking for the angle.
And that is because there is a simple reality: alarming, even sensational headlines attract more clicks – and in the world of digital media, that is how media outlets drive revenue. “Market faces strain” will always outperform “Market remains steady” in a news feed.
It’s not a conspiracy – or at least, not exactly; it is just how attention works online. If it is a conspiracy, it is one in which the public are tacit co-conspirators.
Either way, the result is that readers absorb a consistently more negative picture of the market than the underlying data supports.
What the positive signals actually tell us
Let us set the macro noise aside for a moment and look at what the transaction-level data shows this week – about the market as a whole, first, and then we will look at Oxford next.
Rightmove’s May index, released this week, shows asking prices rose by 1.2% in the past month, reaching an average of £378,304.
That is above the 1.0% typically seen at this point in the year, suggesting seller confidence is holding. Admittedly, asking prices remain 0.3% lower than a year ago, but over 12 months – and 12 rather turbulent months as a whole – this feels fairly nominal.
The number of sales agreed is running just 4% below last year.
The North-South divide in these numbers is also important: the North West is seeing asking price growth of 2.6% year-on-year. London prices overall are down 2.4%.
National headlines blend these figures into an average that doesn’t serve either market particularly well – and is why it is always more important to know our local data; again, we will come to that shortly.
Buyer choice at an 11-year high sounds, at first glance, like a warning about oversupply. In practice, it reflects a market with enough activity to generate choice without collapsing prices – the kind of balanced environment that serious buyers and motivated sellers actually prefer to the frenzied conditions of 2020–2022, when properties could be sold within hours… and equally, buyers were making decisions they often later regretted.
The buy-to-let news deserves particular attention. Professional landlords and investors tend to be less emotionally driven; for them, property investment is a pragmatic exercise. And it is true: many landlords have decided to sell their rental properties, for a range of reasons, but let’s accept that a significant enough number will be worried about the Renters’ Rights Act and other legislative changes as well as tightening requirements, at a time when margins are becoming more squeezed.
That said, it is also true that buy-to-let purchasing activity is increasing.
How can both things be true? Because some landlords are selling up, but other professional landlords are buying that stock to increase their portfolios.
When landlords increase purchasing activity, it reflects a calculated assessment that the numbers work: yields are viable, demand from tenants is strong, and the entry price is reasonable – at least in terms of the maths involved.
This is an underappreciated indicator, and it is pointing in the right direction.
The £5,000 deposit mortgage: the week’s most underreported story
Of all this week’s property news, the story about a new £5,000 deposit mortgage, albeit capped at £300,000 purchase price, tells us something about the attitudes of lenders right now – and yet, it is receiving little in the way of mainstream coverage.
Lloyds Banking Group, the UK’s largest mortgage lender, launched a five-year fixed mortgage this week, available to first-time buyers with a deposit of just £5,000.
Available through Lloyds and Halifax, and through third-party brokers, it carries a rate of 5.89% with no product fee, on properties worth up to £300,000. It is open to both employed and self-employed applicants. The deposit must come from the buyer’s own savings rather than a gifted contribution.
The significance of this should not be underestimated. Saving a deposit has consistently been identified as the single greatest structural barrier to first-time buyer home ownership — more significant than monthly mortgage payments for many renters, who are often already paying comparable sums in rent. This product directly addresses that barrier. It will not be suitable for every buyer, and the 5.89% rate reflects the higher LTV risk. But for someone with a stable income, a good credit record, and £5,000 saved — who previously faced years of additional saving — this is a material change in what is possible.
Back to bond yields...
It would be misleading to dismiss the gilt yield story entirely. Sustained high gilt yields do feed into swap rates, and in turn these feed into the way that fixed mortgage products are priced up.
The average two-year fixed rate has already moved from 4.25% before the Iran conflict to around 5.18% this month, before edging back slightly. If political uncertainty around a potential Labour leadership change adds further pressure to gilt markets, some of those improvements could reverse.
But the transmission from gilt market to completed transaction takes time — typically months, not days. The Bank of England’s base rate, held at 3.75% in April, remains the anchor – and more news this week: inflation fell from 3.3% to 2.8% in April. Analysts are being quick to caution that we could see it head up again, but as one of the main considerations of the panel who vote to set the Bank of England base rate, this sort of news makes it more likely they will vote to hold rates again when they next meet on June 18, rather than voting for an increase ahead of the summer.
And that would help keep mortgages level, or perhaps even encourage lenders to bring their product rates down.
In fact, mortgage products are currently being cut by major lenders even as yields spike, because swap rates and base rates do not move in lockstep with gilt yields at the long end of the curve.
The picture is genuinely complex, which is precisely why it rarely fits a clean newspaper headline in either direction.
What is actually happening in the Oxford property market?
Understanding the wider national market is valuable, but knowing how the local Oxford market compares and how it is currently performing is of much greater use.
And the picture in Oxford is broadly positive – if you don’t set your barometer to average property prices and their growth or otherwise over time.
That said, the average sale price in Oxford has increased in the past 12 months. We tend to focus on sale prices rather than asking prices here at Cherry Picked Residential, as ultimately that is what concerns sellers.
Nevertheless, as the news stories this week have largely focussed on asking prices due to the release of the Rightmove Index, let’s take a quick look.
The average property asking price in Oxford is currently £530,931, according to data from Dataloft. That is a 0% change in a month, and therefore lower than the national growth of 1.2% as reported by Rightmove – although there has been a 0.9% increase in the last 3 months. Average asking prices have also fallen by 3% in the last 12 months.
However, the average sale price, currently £486,496, has actually risen by 2% over the same period.
Asking prices may have dropped, but sale prices have increased – and what really matters more, if you are thinking about selling your home?
The practical conclusion
No matter what you see or hear when it comes to national property headlines, it is important to take a balanced view. Remember, they are written for different audiences, measuring different things, and are produced in an editorial environment that prefers alarm over nuance.
The market right now on a national level is neither in the sort of crisis the press will often imply, nor is it experiencing the sort of boom that over-optimistic sellers sometimes price for (and indeed which some over-optimistic estate agents seem to want to encourage).
It is a functioning market seeing transaction numbers tracking similar levels to last year; a little lower perhaps, but nevertheless supported by genuine buyer demand.
Homes priced correctly are selling. Those priced ambitiously are not. Rightmove data shows a correctly priced property sells in 36 days on average, against 127 days for one that requires a reduction.
That gap – 91 days – is the real story this market needs to be told more loudly and more often. Not stories about gilt yields, not even the Rightmove headline figures, but the simple reality that accurate pricing from day one is the single most significant decision a seller makes.
If you would like to understand what the market is genuinely doing in Oxford right now – not what the national headlines say, but what is actually happening on your street – we are always happy to talk it through.
