The clocks changing and evenings growing longer mean we can put off winter no longer: with that comes an inevitably quieter housing market. Especially after the year of high inflation and even higher interest rates we have seen in 2023.
This reality is reflected in this month’s insights from Propertymark, the largest professional trade body for estate agents. We have access to the organisation’s data, compiled by estate agents dealing daily with buyers and sellers.
Housing market overview
It’s not that the news is bad – actually, the housing market remains more robust than many would have anticipated given the state of the wider economy. But agents are seeing fewer sales being done, buyers being more cautious, and prices dipping slightly.
There’s no need for pessimism but it’s clear that housing market realities mean anyone selling now needs the expertise of a skilled agent more now than at any time since the pandemic.
The sales market data
Over recent weeks the housing market data is showing up that there’s been a reduction in buyer numbers registering with each Propertymark branch. On average it’s down to 60 from a high of 81 in August. And the number of viewings per property over the month remained static in September at two, which is lower than the 18-month rolling average of three.
The number of homes newly listed for sale at each Propertymark branch has decreased too, from 13 to 11. Although that is actually above the 12-month rolling average of nine.
Meanwhile, the average number of market appraisals (which gives us a good idea of the future supply of homes going on sale) has dropped to 20 from 25.
Each branch currently agrees about eight sales on average over a month. This is in fact a pretty typical figure for this time of year.
But unsurprisingly very few now sell for above the asking price while the time taken to exchange contracts is getting worse. Agents say it’s not unusual for it to be 17 weeks or more. This is because buyers are more cautious, instruct surveyors to check properties and work hard to get the best mortgage deal in the current high-interest rate environment.
We’re clearly a long way from the heady days when multiple buyers were vying for each home on sale, with quick deals often at above the asking price: but we’re also a long way from a crash.
Most house price indices and reputable forecasters say prices have dipped less than five per cent. And remember, if that means your home would sell for less than before, it also means your next purchase will probably be cheaper too.
The rental market data
There’s no prize for guessing what’s happening in the rental market. Unfortunately there is no end in sight to the supply of rental property lagging far, far behind demand.
Propertymark’s chief executive, Nathan Emerson, speaks for many (including tenants obliged to pay high rents) when he says: “Governments across the UK continue to tinker with legislation and legislative programs, disincentivising landlords along the way. That means supply remains tight with far more applicant registrations than properties available”.
In terms of numbers, new prospective tenants registered per agency branch dropped to 96 in recent weeks from 121 in August. But this is most likely due to seasonal fluctuations – for example, students who were registering over the summer.
The average number of properties available to rent per branch is now broadly the same as in August at 11 properties, and this remains woefully under the level of demand.
The upshot is that rents stay stubbornly high but my advice to landlords is not to overestimate tenants’ ability to pay. It’s clear that affordability is the big issue now in the lettings sector, with many tenants lacking savings or other sources to fund ever-increasing rents.
What’s ahead for the housing market?
The reminder that the festive season is looming large has a serious point to it.
Housing markets everywhere become much quieter towards Christmas as we’ll see in the coming weeks and in the current climate it would be easy to interpret this as another bad sign. But it isn’t – it’s what happens as buyers and sellers put plans on ice until next year.
There will be more about the market leading up to Christmas in a few weeks’ time when I reveal further insights from Propertymark. Until then…
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Last Updated: November 22nd, 2023
