It will not come as a surprise to anyone that the housing market in the UK is under pressure. The most recent RICS UK Residential Survey reported that the number of new enquiries from buyers has how fallen for the fifth month in a row, bringing the number of sales down to their lowest level since May 2022. The rise in both mortgage and interest rates is expected to cause this downward trend to continue for certainly the next 3 months, if not extending further into 2023, likely being intensified by the general uncertainty caused by the cost of living crisis and increasing energy bills.
While the historically low number of houses on the market has manged to keep house prices high, this is not expected to last, as the pace of growth has been slowing noticeably in recent months. Currently it is estimated that estate agents hold on average just 34 residential properties on their books. This was reported as a net balance for market appraisals of -20%, down from the -3% reported in the previous month’s market survey, demonstrating that supply is continuing to shrink.
The lettings market on the other hand continued to see a more positive number of enquiries reported by a net balance of +42% of survey contributors. However, this was balanced by a fall in landlord instructions by -13% of respondents, which indicates that there is likely to be further growth in rental prices in the near future.
Jamie Chamberlain, AWH’s Sales Director, commented:
The immediate market is supported by those who are cash buyers, perhaps about 25% of the market anecdotally, and those who have prearranged finance at lower rates that the banks cannot withdraw from. They will be still looking to make and complete their deals for a myriad of reasons and needs beyond cost of finance. This will provide both support to the market but also temporarily hide any underlying weaknesses until any contrary empirical evidence arrives, perhaps in the New Year.
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