Despite the enormous rise in the cost of living, the number of people expected to move house in the UK over the next three months has increased quarter-on-quarter by 72% from 191,538 households in January 2022 to 328,640 in April 2022.
According to the Q1 2022 Property & Homemovers Report from property and data insight specialist, TwentyCi, the number of people wanting to Move Soon has also increased, rising from 317,793 households in January 2022 to 365,873 in April 2022. This increase of 48,000 households roughly equates to the same number of households in the city of Exeter.
At the beginning of April 2022 there are over 1.45 million households progressing through the home move journey which, in addition to Wanting to Move and Moving Soon, also includes households that are Moving Now, Just Moved or Settling In. This is an increase of nearly 300,000 households compared to January 2022. The spending power associated with this massive volume of movers, estimated to be worth 3% of GDP, can bring huge revenue gains and strong ROI across multiple sectors and categories, particularly as the economy and retailers start to experience a slowdown in consumer expenditure due to the cost-of-living crisis.
Colin Bradshaw, TwentyCi’s Managing Director, commented:
“2022 has not, as yet, brought a re-calibration of the residential property market. On the contrary, the owner-occupied sector appears to be removed from the woes that are besetting the wider economy and this despite households wrestling with the rise in the cost of borrowing, price inflation and the surge in fuel and energy charges.
It would appear that homeowners continue to be determined to take advantage of the rise in property prices that has occurred over the past two years, both trading up and down the property ladder. It is also the case that whilst interest rates have risen, the cost of borrowing is still at an historically low-level benefiting affordability, so will this trend end anytime soon?”
Key indicators
Sales Agreed have risen by 17% since Q1 2019 (the last “normal” period of performance within the residential property market, prior to the impact of Covid-19) and Exchanges have jumped by almost 21% highlighting the surge in activity that occurred throughout the pandemic.
By contrast, new instructions are down by nearly 9% compared to Q1 2019, indicating that a strong sellers market still persists. Without a significant uplift in the volume of new instructions, the residential property market is at risk of significant slowdown later in 2022. This is also reflected by the huge reduction (-49% year on year) in the number of price changes. Home sellers can now command close to the asking price for their property, with no need to discount. Withdrawal is also down by 34% as sellers can achieve a quicker sale than in prior years negating the need to remain in their existing property.
Property stock
There remains an acute lack of stock coming to the market. Demand has now outstripped supply for the last 18 months. Aside from inner London, the whole of England and Wales at a regional level have just under two months’ worth of property stock left to sell and overall, the available months of stock are down by almost half on historical norms.
Average asking prices
The average asking price across the UK is now £403,000 compared to £339,000 in Q1 2019, an increase of 19%. High prices are being maintained by the lack of property stock coming to the market.
All regions of the UK have benefited from the increase in property asking prices with the lower performance of inner & outer London a direct consequence of the impact of the pandemic.
Sales by region
Sales Agreed across the whole of the United Kingdom for Q1 2022 are now on average 17% greater than Q1 2019, highlighting the continued high level of transactions that continue to persist. With a 38% increase in sales agreed, inner London has experienced a significant rebound compared to the start of the pandemic.
Hybrid/online agents
The market share of the Hybrid/Online agents in Q1 2022 for exchanges stands at seven per cent representing a small increase quarter on quarter, but still significantly down from the high of 8% in 2020. Purplebricks, Yopa and Strike remain the dominant brands representing nearly 75% of all hybrid/online activity.
The market share of the hybrid/online agents remains polarised to the lower value properties, a situation that remains unchanged from previous periods. The failure to be adopted by sellers of higher value properties will inhibit the ability of these agents to establish significant market share in London and the South East, where the property value and density of housing is greatest. The market share by region confirms the challenge faced by these agents in breaking into those regions of the UK with higher property values. Market share in the West Midlands and Yorkshire and the Humber currently stands at almost 12% respectively, whilst in the East, South East and South West of England market share falls to 4%.
Lettings
When comparing the lettings sector in Q1 2022 with Q1 2019, the challenge of this market is clear, with the whole segment massively underperforming. New instructions are down by over 28% compared to Q1 2019 outlining a lack of rental stock available. The volume of Let’s agreed is also down by 17 % compared to Q1 2019.
Colin Bradshaw said:
“With a lack of stock in the residential owner-occupied sector, one might expect a buoyant rental sector. However, we are seeing an extremely lacklustre level of activity. With fewer rental properties coming to the market, one would expect an excess in demand to result in a higher level of lets occurring, but perversely this is not the case.
One might surmise that renters are staying put, with few alternative options available, the step to the owner-occupied sector extending and the pressure on household incomes encouraging people to stay put. We are also undoubtedly seeing some effect from the shrinkage in the number of landlords due to the tax changes put in place in 2019.”
