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
Average UK sold prices rose by 0.6% in the twelve months to July 2023. As reported in the latest government house price index, this compares with 1.9% in the year to June 2023.
Trends are similar on a non-seasonally adjusted basis, with average sold prices rising by 0.5% between June and July 2023.
Excitingly, the North East of England far outperformed the rest of the country with a twelve-month increase of 2.7%. At the other end of the spectrum, the South West saw prices drop by -1%.
These stabilising prices are largely due to continued weak buyer demand and slower housing supply than the previous year. There were just 86,510 residential property transactions over July 2023 – 16.3% lower than the same period last year.
Mortgage approvals (a good indicator for future borrowing) also decreased by 15% between June and July 2023.
Rightmove – Asking Prices
Average Rightmove asking prices increased to £366,281 over August 2023. That’s a monthly rise of 0.4%, falling just below the 10-year average (of +0.6%) this time of year.
August was also quiet for new sellers, with the number of new properties coming to market 6% lower than the 10-year average. In good news for the coming months though, new listings were up by 12% in the first week of September compared with August averages.
While buyer enquiries remained steady over August, tough economic conditions, summer holidays and lack of stock contributed to a large fall in agreed sales. These were a whopping 18% lower than 2019.
Like previous months, first-time buyer properties outperformed the rest of the market (only 13% down on 2019). Although the economic situation remains challenging, lower mortgage rates are helping these figures. As such, we could see the first signs of improving buyer affordability…
RICS – Chartered Surveyor Sentiment Survey
The August RICS Residential Survey paints a deeply negative picture for market activity and house prices, with little turnaround expected in the next few months.
With mortgage rates still high, buyer demand and agreed sales have fallen sharply. A net balance of -47% of respondents saw reduced enquiries over the month. Agreed sales also came in at -47%, the weakest reading since the early pandemic.
New instructions fell to -26% over August (down from -17% in July), the lowest reading since September 2021. Further reflecting subdued activity, sales took an average of 20 weeks to complete – way up on 16 weeks in late 2021.
House price growth fell to -68%, marking the lowest reading since February 2009! And what’s more, near-term price expectations suggest further falls to come – slipping deeper into negative territory at -67%.
Predictions only marginally improve at the twelve month horizon, rising from -49% in July to -48% in August.
Zoopla – Housing Market Outlook
In their latest Market Outlook report, Zoopla describe a housing market adjusting to higher borrowing costs.
With mortgage rates more than doubled (compared to 2021) and cost of living pressures hitting hard, buyer affordability has taken a knock. Even so, the impact on pricing has been relatively small.
Rather than price reductions, sales volumes are declining. Sales are on track for around one million by the end of 2023, a fifth lower than last year.
Nonetheless, some buyers are likely to return to the market this autumn, having delayed moves until mortgage rates settled. The sooner mortgage rates return to 4.5%, the sooner we’ll see market activity improve. Zoopla predicts this isn’t likely until 2024.
Improved mortgage rates don’t mean asking prices will necessarily rise though. Prices will have to remain low and even decrease in unaffordable areas to boost buying power and free-up the market.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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