Welcome to the latest housing market update from the estate agents’ body Propertymark.
You’ll know from previous reports that I consider this to be a very valuable snapshot of the market because it comes from those dealing day-in, day-out with sellers and buyers. But unusually this month there’s a small health warning.
The data in Propertymark reports inevitably involves a time lag. And because of the election and two Bank Holiday weekends, this set of data – from May – shows a somewhat slower housing market than would normally be the case.
Nonetheless there are some valuable trends to observe, so let’s dive into the figures.
Housing market sales
The number of potential buyers who registered an interest with agents in buying a property dropped by 16% in May. There was also a 6% fall in market appraisals given by agents to people at the first stage of considering a sale.
Even so it’s interesting to note that during this quiet period, Propertymark still ticks up a small average house price increase, up by £946 to £281,373.
Meanwhile, the average number of new prospective buyers registered per branch fell from 88 in April to 74 in May.
To reiterate, my take on this is that the slowdown reflects the unusual period under review. Rather than a ‘true’ housing market snapshot. But I’d like to focus on that small rise and the overall average cost of a home.
This is now eight times the typical salary. Good news for existing owners, of course, but a continuing challenge for first-time buyers.
More comforting is the fact that despite much higher mortgage rates in the past two years, we’ve seen very little wavering in prices. Once you’re on the ladder, the housing market is highly resilient, and property continues to be a solid long-term investment.
Rental market overview
Whereas sales are largely ‘discretionary’ (that is, an owner can always choose to wait to go to the market), the lettings sector is driven by need (a tenant must have a roof over their head) – as a result, the rental side of the property market shows no slowdown during this period.
Propertymark agents report a 7% increase in applicants registered. It’s the same-old, same-old I am afraid, with rental demand continuing to outstrip supply, as total registrations increased from 90 in April to 97 in May.
The housing market and the election
As we’ve seen in the sales figures, some sellers and buyers have clearly been hedging their bets, awaiting the outcome of the General Election and possible cuts in interest rates.
One of those is now out of the way – with a decisive result likely – and momentum is growing that the Bank of England will finally start bringing rates down in August or September.
My judgement is that although the rate cuts will be small and gradual, they’ll give a psychological boost to the housing market, so now is a good time to consider selling if that is on your or your family’s agenda for the long term.
Between now and next month’s housing market report there will be many political announcements, too, so plenty to chew on as summer continues. Until then…
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Last Updated: July 3rd, 2024
