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 government’s latest UK House Price Index, average sold prices increased by 0.2% in the twelve months to August 2023.
Inflation was highest in the North East (with price rises of 3.6%) and lowest in the East of England (with a fall of -1.6%).
On a non-seasonally adjusted basis, prices increased by 0.3% between July and August 2023. This is substantially lower than the 0.8% rise seen during the same time last year.
Indeed, the Bank of England reported stronger supply and weaker demand compared with last year. This resulted in stabilising prices, as supply and demand came closer in balance.
The number of property transactions also slowed. Over August 2023 there were 87,010 residential property sales, 15.6% lower than the previous year.
Mortgage approvals similarly fell to 45,400 in August. They sank -8% below July 2023, the lowest number for the last six months.
Rightmove – Asking Prices
Asking prices on Rightmove rose by 0.5% over September, to £368,231.
While prices normally rise this time of year, this was the smallest increase since October 2008. It’s also majorly down on the average 20-year early-autumn rise of 1.4%.
Agreed sales also fell, to 17% below the previous year. There are still motivated buyers out there, but sellers must price attractively from the outset. In this challenging market, those pricing too high (and reducing later) can seriously damage their chances of a sale.
Despite slowing sales, buyer enquiries are still 8% above the same (pre-pandemic) period in 2019. If a seller creates momentum with buyer enquiries on the first day of marketing, they’re 60% more likely to sell then those receiving enquiries later.
Deals on homes that haven’t had their price reduced are also 50% less likely to fall through.
So it’s all about pricing right the first time around…
RICS – Chartered Surveyor Sentiment Survey
Chartered Surveyors report a challenging market. Stretched mortgage affordability continues weighing on buyer demand, with new enquiries at -39% over September 2023.
As a result, sales expectations remain downbeat over the next few months. Agreed sales were at -37% over September, only marginally rising to -24% at the three month horizon.
In good news, sales predictions pick-up for the year ahead. Expectations at twelve months sit at +3%, significantly up from the previous months’ reading of -5%.
New listings remained in firmly negative territory over September, at -17%. With limited market appraisals taking place, immediate improvements to stock levels are unlikely.
With softened buyer demand, prices also remained on a downward trajectory – with a September net-balance of -69%. Prices in the West Midlands and South East of England were hardest hit, at -94% and -91% respectively.
Even so, expectations pick-up at twelve months, with only -33% of contributors foreseeing continued price falls.
Zoopla – Housing Market Outlook
As borrowing costs remain high, the housing market has responded through fewer sales rather than big price drops.
If mortgage rates stay around 4% or 5%, house price falls will be limited (remaining in the low single digits) for the next couple of years. Zoopla predicts these falls will be in the region of -2% over 2024.
With growth in household incomes likely over this period however, market activity will rebound as consumer confidence rises. With more homes for sale, sellers will need to price competitively to secure a quick deal – further fuelling downwards pricing trends.
This rebound could begin as early as the first half of 2024, as buyers who’d previously delayed moves (waiting for mortgage rates to fall) return to the market.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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