Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
HM Land Registry – Sold Prices
In the latest UK House Price Index, sold prices rose by 1.9% in the year to May 2023. This compares with an increase of 3.2% in the 12 months to April.
On a non-seasonally adjusted basis, sold prices remained unchanged between April and May 2023. It reflects a sluggish market, with prices increasing by 1.3% during the same period last year. Indeed, the Bank of England’s Agents Summary noted weaker buyer demand and stronger supply leading to these stabilising prices.
Property transactions fell to 80,020 in May. This was a 2.7% monthly drop, but a massive 27% lower than 12 months ago. Even so, mortgage approvals rose by 3% between April and May, suggesting cautious optimism for market activity.
Price rises were highest in the North East (+4%) while the South East witnessed the lowest annual growth, with barely any change in the year to May 2023.
Rightmove – Asking Prices
Rightmove saw average asking prices fall by 0.2% (-£905) over July to reach £371,907. This was only slightly below steady expectations at this time of year, as pricing outperformed pessimistic predictions at the start of 2023.
Despite this, inflation and rising interest rates are impacting the market. Agreed sales in June were 12% behind 2019’s more normal levels. Second-stepper and top-of-the-ladder sectors were worst impacted, sitting 14% behind 2019. This was likely due to movers reassessing budgets in light of mortgage rate increases. At the other end of the market, first-time buyer properties were only 9% down.
Even with slow market activity in the face of higher rates, buyer demand held strong – at 3% higher than 2019. Attractively priced homes continue to entice motivated buyers, due to the ongoing shortage of property stock compared with historic norms.
RICS – Chartered Surveyor Sentiment Survey
Chartered Surveyors also point towards slowing sales activity as a result of escalating interest rates. As borrowing costs crept ever-higher, almost all metrics fell deeper into negative territory.
New buyer enquiries slipped to -45% in June, marking an eight month low. Newly agreed sales fell to -34% (down from -8% the previous month) and sales expectations at the 12 month horizon were also similarly downbeat, at -31%.
The picture remains similar for house prices, with a net balance of -46% in June. Price expectations also remain negative for the year ahead, falling to -49% from -3% in May.
While the supply of new properties picked-up slightly during May, this held relatively steady at -1% over June. The average number of properties on estate agents’ books (37.4) is slightly higher than at the end of last year, but still incredibly low in terms of historic figures.
Zoopla – Housing Market Outlook
In their latest market report, Zoopla note future activity will heavily depend on inflation and Bank of England base rate rises. If mortgage rates remain high over an extended period, this will significantly impact the market.
While price drops reversed over the first half of 2023 (as mortgage rates fell towards 4%, compared with 5.5% in late 2022), recent spikes reduced buying power. Zoopla predicts weakened buyer demand will push down prices over the remainder of the year.
As a result, Zoopla expects price falls of up to 5% by the end of 2023. Even if mortgage rates return to 4-5%, they still predict incredibly low price growth over the next couple of years.
Despite stagnanting prices, sales volumes are likely to remain around 1 to 1.15 million by the end of 2023. Even with higher mortgage rates, various demographic, social and cost-of-living factors continue driving moves.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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