Beginnings of a buyers market?
Property prices and availability at this moment in time are causing a change in how the housing market affects buyers. There are initial signs that the over 6-year-long seller’s market may be over with power starting to shift towards property buyers. So here we will examine the claim made about the current property market by some of the industry experts and what this could mean for buyers and sellers.
Julys House Price Index
The statement that the housing market is becoming more buyer-friendly doesn’t seem to bear fruit when analysing the ‘House Price Index’. Going into July, the House Price Index for the month shows a fifth consecutive record in house prices. The average house price nationally now stands at £369,968 having risen by 0.4%. However, compared to last year there are fewer buyers and more sellers coming to market. According to Rightmove, the number of buyers is down 7% compared to last year. The opposite is true for sellers with 13% more properties on the market. So with slightly more supply and falling demand, the balance of power can be seen to swing in favour of buyers. It is important to note that buyers’ demand is still higher than pre-pandemic levels while the housing supply has also not recovered. Here is what our senior sales valuer Levi had to say about current property market trends;
“The property market definitely feels different compared to this time last year and the year before that. The heat feels like it’s slowly dissipating from the market and is partly due to factors out of the general public’s control e.g. high-interest rates and the general ‘cost of living crisis’. While a correctly priced property with good marketing will generate strong initial viewing interest, sellers who are going on at inflated prices (thinking the market is still extremely buoyant) will be met with limited viewings and will eventually need to reduce in order to sell.”
Due to this slight increase in supply and lessening of demand, experts in the property industry have claimed we are seeing the start of a buyers market. Marc de Silva at the Property Industry Eye has stated that this could lead to a
“steadier, more manageable environment after the frenzy of the past two years, a ‘new normal’ or elevated version of the pre-pandemic market.”
The elevated version of the pre-pandemic market seems to like the most plausible outcome going forward. Although housing supply is set to increase faster by the end of the year as demand is still so high we are unlikely to see a significant price correction in the coming year. Mr de Silva agrees with this, saying that it
“will likely take several months for the effects (of increased supply) to be seen”.
Not quite there yet
So while we are starting to see the conditions for a buyers market we aren’t quite there yet. Although housing supply is increasing, demand is still higher than pre-pandemic levels. Additionally, there are concerns about the economic forecast for the UK as a whole. Ben Woolman, director at Woolbro Group stated that;
“Though the economic reality has taken longer to dawn on the sector than others, buyer confidence is now clearly ebbing away amid rising inflation and tightening belts”.
So, the only factor putting a damper on house price increases at the moment is the cost of living crisis. How lower-income mortgage holders manage over the next couple of months will determine whether a market correction will occur.
If you are considering selling your property before any winter slowdowns in the market, feel free to get in touch with us here.