Property Insights Round Up for 4th December 2023.
Today’s Conveyancer reported on the latest property transaction data, stating that property transactions were down 17% in October 2023 compared to the same time last year.
Propertymark published their Housing Insight Report which covered date for October 2023. Key takeaways included:
- 13% decrease in the number of potential homebuyers registered
- 19% reduction in new properties that came to the market
- The average number of viewings per property for sale remained the same from August.
- During October, 75% of transactions had taken 13 weeks or longer to complete.
Nathan Emerson – CEO of Propertymark, said:
“The Autumn statement had an upbeat feel and yielded some positive news for the housing industry. However, this is no time to celebrate. The cost of-living crisis continues to limp on, and the International Monetary Fund forecast that the UKs growth will be the slowest in the G7, whilst its inflation will be the highest.
The resultant uncertainty continues to impact the housing market. In the residential sales sector, interest rates remain high, causing first time buyers and movers to think twice. This is evidenced by the number of prospective buyers registering at our member branches falling and the number of market appraisals being undertaken trending downwards.”
Rightmove released their 2024 forecast, predicting that prices will drop by 1% as competition increases among sellers. This prediction is in relation to new seller asking prices and that they will be 1% lower nationally by the end of 2024.
They predict that the market will continue its transition to levels more familiar with ‘normal’ levels, following the ‘frenetic’ post-pandemic period. Rightmove expect sellers will have to price more competitively to secure a buyer in 2024, with agents having to work even harder to build chains, especially at the bottom end where first-time buyer affordability will like remain stretched.
Rightmove predicts that buyers coming to market in 2024 are in a strong position to negotiate on price as well as take more time to choose the home that’s right for them.
However, Rightmove note that the number of available homes for sale has only just increased to pre-pandemic levels and at present there are no signs of an increase in new listings which would create an increase in the number of homes for sale. That means that with more choice and fewer buyers on the ground, sellers who are willing and able to price more temptingly will attract buyer’s attention.
Finally, Rightmove predicts that mortgage rates will settle but remain elevated, this will have an impact on some buyers’ budgets, especially in the lower and middle market sectors.
Agents predict there is likely to be a far greater need for securing first-time buyers for the bottom end of chains in 2024 with a view to them building longer chains, which in turn should mean more sales, and ultimately keep transactions moving.
Rightmove’s property expert Tim Bannister, said:
“This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties. However, it has been a challenging change in mindset for some sellers to transition from the frenzied market of the previous few years. The level of sales being agreed is 10% lower than at this time in the more normal market of 2019, so sellers will need to price even more competitively next year to make sure that they secure a buyer.
We predict a modest average fall of 1% in new seller asking prices next year. This will be felt more keenly in some areas of Great Britain than others. The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand. In areas with more discretionary sellers and fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.”
Nationwide released their House Price Index with the latest index showing that UK house prices rose 0.2% month on month in November, and annual growth is the strongest it has been since February 2023. House Prices however are down 2% compared to this time last year.
Zoopla released their latest House Price Index, which reported that the housing market continues to adjust to higher mortgage rates with lower transactions and some modest house price decreases. Zoopla states that there is some evidence suggesting that sellers are becoming more realistic when it comes to the pricing of their properties – however, this comes at a price, they are accepting significantly larger discounts than the asking price. The average discount currently sits at £18,000, which is the highest it has been for 5 years.
Zoopla also notes that agreed sales are still holding well, with there being far more homes available to purchase now than in recent years. Supply has rebounded the most in 3-4 bed properties and supply across all property types is at a six year high.
Guy Gittins, CEO of Foxtons, said of the data:
“More property market positivity today, with house prices recording a second consecutive monthly increase.
Although the market is yet to return to full health when viewing house price performance on an annual basis, it appears as though a freeze in interest rates is helping to boost homebuyer sentiment and bring a greater degree of stability and this puts us in very good stead looking ahead to the new year”
CEO of Yopa, Verona Frankish, added:
“A second consecutive monthly increase in the rate of house price growth provides further evidence that the UK property market will finish the year on the front foot
The latest Bank of England data also shows that mortgage approvals have started to climb following a second decision to hold the base rate at 5.25%.
It’s clear that this greater degree of stability is already boosting market sentiment and allowing buyers to act with more confidence.
The fact that they are also choosing to do so this side of the Christmas break is positive and suggests that we should see a far more settled landscape come the new year.”
Marc von Grundherr, Director of Benham and Reeves, commented:
“It’s been a strange and uncertain year for the UK property market and so it’s only fitting that house prices should start to rally at a time of year when we usually see a seasonal lull.
Home sellers will rejoice at the strongest house price performance in nine months and, with mortgage market activity also starting to increase, the current outlook is very positive indeed.
However, those who have so widely prophesied the demise of the market over the last year will no doubt turn green with Grinch like fury having been proven wrong once again.”
GetAgent.co.uk (an estate agent comparison site) released their latest research, which shows that monthly visits had fallen by 18% in the last year. They attributed this decline due to higher mortgage rates impacting the market at every stage of the buying process.
Between the three major property portals in the UK – On The Market, Rightmove and Zoopla, they had just over 400 million visits over the past three months (August to October 2023). Rightmove is the most visited portal with 61.7% of the visits, Zoopla at 21.7% and On The Market at 11.2%.
Co-founder and CEO of GetAgent.co.uk, Colby Short, said:
“It’s no surprise that portal visits have declined in the past year. The market has slowed – not crashed – as a result of economic turmoil pushing mortgage rates higher than we have seen in the UK for many years.
But UK homebuyers remain an aspirational bunch, so they’re still hitting the portals at a greater rate than nearly every other country we studied during the course of this research.
There was, until recently, some hope that the UK government would introduce a break or reduction in stamp duty, thus supercharging the housing market as we saw when the holiday was introduced during the first wave of the COVID-19 pandemic.
But, in the end, Jeremy Hunt’s Autumn Statement came and went with no mention of any such tax break, which means the downward trend of portal visits could potentially continue, at least into the early months of 2024.”
