If you are looking to buy or sell a home, you are no doubt curious about what is happening within the property market. Liz Truss’s mini-budget certainly rocked the market and, according to latest research from Bloomberg Intelligence, it ‘spooked’ as many as 44% of prospective buyers. With the latest House Price Index recently being released by Rightmove, we felt it was the ideal time to share, before the festive season kicks in, to give you an insight into what the state of the industry and is predicted. Therefore, here is November’s guide to the property market from your local estate agent team.
The challenges caused by the rising cost of mortgages combined with the cost of living crisis were bound to have an impact on buyer demand. The latest House Price Index by Rightmove showed that demand by buyers fell by 2% in October compared with a year ago. Bloomberg Intelligence found that 56% of potential buyers still intend to purchase a house within 1–2 years.
Iwona Hovenko, Real Estate Industry Analyst at Bloomberg Intelligence: “Our survey suggests most prospective UK homebuyers haven’t been deterred by mounting economic pressure. Crucially for homebuilders such as Barratt, Persimmon, Taylor Wimpey, Bellway and Berkeley, many people have shown significant flexibility, considering cheaper homes or making other sacrifices to counter rising interest rates.”
Talking to prospective buyers, their main concerns are the increasing economic uncertainty and the soaring costs of borrowing. First-time buyers are the most nervous, which is understandable, as moving home can be overwhelming without adding the current additional financial pressures. This is possibly why in October new buyer inquiries fell for the sixth month in a row, as revealed by research from the Royal Institution of Chartered Surveyors.
Yet despite this, we need to put this into perspective, especially as the market since the pandemic has been incredibly buoyant. If we compare these figures in buyer demand with 2019’s pre-pandemic levels, Rightmove stated demand is still up by 4%.
“The era of historically low interest rates and the buying frenzy are over, which could make way for a more normal market that opens up potential opportunities for those who were put off entering the frantic market over the past two years,” said Tim Bannister Rightmove’s Director of Property Science.
Many sellers are aware that things have changed within the property market and are willing to take steps to see their home sold. As estate agents, we have to acknowledge what the local market is telling us, and house prices are lower than they were a few months ago, which means that we may recommend that we drop your house price to be in line with the market conditions and to attract potential buyers. Remember, if you are buying as well as selling, any drop in price will no doubt be reflected in the price of the home you wish to purchase.
What is the data telling us? Rightmove’s House Price Index states that there has been a 1.1% drop in the average price of a property. This is in line with 2015–2019 pre-pandemic years which also recorded an average of 1.1% drop in November. Again, if we compare the number of unsold properties on Rightmove in October, 8% were reduced last month compared with 7.5% of properties in October 2019. This suggests it could be a seasonal shift as many turn their focus from moving home to preparing from Christmas.
“The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain, but what is certain is that the exceptional price growth of the last two years is unsustainable against the economic headwinds and growing affordability constraints. Home-owners who come to market in the final few months of the year tend to price lower to attract buyers in the lead-up to Christmas, and we’re hearing from agents that both existing and new sellers understand that to sell in the current market they need to price competitively. During the market frenzy many agents said that they had to rip up the rule-book on valuing properties due to bidding wars, but now they’re back in more familiar territory, and pricing right first time is even more critical to securing a quick sale.” Tim Bannister Rightmove’s Director of Property Science.
The price has to be right
In this market it is essential that you choose an estate agent that completely understands the property market trends to ensure that your property is correctly priced for sale. If you would like a realistic valuation for your home, call your local estate agent team today.