Our monthly update on the UK housing market – covering sold and asking prices, current market sentiment as well as the property outlook for the year ahead.
In the year to March 2022, house prices in England grew by 9.9%. Although a significant rise, this represents a slight slowing in the market, down from 11% in February 2022.
Sold prices in the East Midlands rose by 12.4%, taking-over from the South West and East of England as the fastest-growing region. London remains comparatively sluggish at just 4.8% in the year to March.
On a non-seasonally adjusted basis, average prices increased by 0.3% between February and March. This compares with an increase of 1.3% the previous year.
Across the market as a whole, detached house prices increased by the largest amount – rising to £472,000 by the end of March (+13.8%). Reflecting trends seen earlier in the year, flats and maisonettes increased by just 4.1% to an average sold price of £245,000.
In May 2022, average asking prices hit a new record high for the fourth consecutive month. Rising to £367,501, this represents a monthly increase of 2.1% (£7,4000) – the highest jump this time of year since 2014!
It also reflects a staggering £55,551 jump in asking prices since the housing market shut-down during coronavirus restrictions. To put this in perspective, asking prices rose by just over £6,000 in the two years before 2019.
Belying earlier predictions, economic concerns and interest-rate rises haven’t dented asking prices. Whilst the number of available properties is 55% less than in 2019, agreed sales are comparatively up by 12% (even with restricted choice). Despite this, sales are down by 17% compared to 2021.
These statistics suggest the lack of homes for sale (as opposed to low buyer sentiment) is the main factor hampering the market.
In the latest RICS UK Residential Market Survey, respondents note new buyer enquiries remaining strong but agreed sales flattening out. Combined with a sluggish trend in fresh listings, prices continue to rise across all areas of the UK.
As of April 2022, a net balance of +10% survey participants reported increases in new buyer enquiries. Despite this, the net balance of -2% for agreed sales reflects a stagnating market. New instructions were also at -1%, with average stock levels remaining at historic lows.
In good news, +12% of participants anticipate the number of transactions increasing in the coming three months. This falls-off sharply to -4% at the twelve month horizon however, signalling a generally flat trend.
With growth in buyer demand combining with lack of supply, +80% of respondents unsurprisingly report house price increases over April 2022. This is slightly up from +74% the previous month; a trend set to continue for the year ahead.
In their latest market outlook report, Zoopla predict a slight brake on the property market during the latter half of 2022. House price increases, high interest rates (impacting mortgage affordability) and rising cost of living are all cited as factors.
Zoopla report pressures on household budgets is already impacting buyer sentiment at the lower end of the housing market. Purchasers with more disposable income are largely driving current market activity, but this is also predicted to slow by the end of the year.
Indeed, the time taken to sell homes is already starting to rise, as are discounts on asking prices. Whilst this could suggest price rises are hitting a natural ceiling, Zoopla don’t predict house price falls. Price growth forecasts remain modest at 3% by the end of the year.
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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