STATS: Market Share 2023 (The Roseland Peninsula): 43.56% Average House Price 2023 (H Tiddy sold properties): £996,139 for all properties sold and £1,341,996 in St Mawes. Average Pounds Per Square Feet 2023: £672/sq.ft (£8162/sq.m) for all properties sold and £883/sq ft (9507/sq.m) in St Mawes.

H TIDDY
Mark Willson, Director

H Tiddy Independent Estate Agents are based in the exclusive Cornish coastal village of St Mawes. We have been established for over 100 years and we are recognised specialists in a niche market. For over 16 years, we have been proud members of The Guild of Property Professionals with exclusivity to cover The Roseland Peninsula, near Truro, in South Cornwall.

For the first eight months of this year, we successfully sold nearly £21 Million worth of properties in our beautiful coastal Area of Outstanding Natural Beauty. This result is particularly pleasing for us as this exceeds our sales figures in the more buoyant market during the same period last year. From 1st January to 1st September 2022, we sold and completed on just under £19 Million worth of properties with an average house price of £899,784 at £692/sq.ft (7448/sq.m). This equates to an unprecedented 10.71% increase in localised annual average house price growth. So far this year we have sold a broad and varied range of properties in all price categories from a detached cliff top hobbies hut, which fetched considerably more than its £50,000 marketing price after a competitive bidding situation with interest shown and offers from multiple buyers.

Pleasant surprise

Our sales figures so far in 2023 are a pleasant surprise given the state of the economy and increasing interest rates. The Nationwide announced in August and The Halifax in July that Annual House Prices in the UK had declined by 5.3% and 2.4% respectively. Both predict ongoing monthly house price decreases whilst the gap between average wages and mortgage rates plus lending criteria remain relatively broad. Even though we are not complacent enough to believe that our area in Cornwall can be isolated from national housing market conditions, we are delighted that our hard work, local knowledge, and experience has reaped rewards where, we hope, the sun will continue to shine, both metaphorically and literally on The Roseland Peninsula.

Featured property: Crossways, St Mawes, Cornwall – Guide Price £2,975,000. 

ILKLEY, WEST YORKSHIRE

STATS: Time on Market: 99 properties average 127 Days Average Sale Price: £683,000 (last 49 Sales) Under Offer- June 2023: 14 Sales (SSTC)

HARRISON ROBINSON ESTATE AGENTS
Greg Harrison

As voted by the Sunday Times the Yorkshire Spa town Ilkley, took home the prize of best place to live in 2022. Standing firm at the top of the list, with one reviewer writing: “Ilkley continues to dazzle with its enviable shops, schools, stunning scenery, and transport links.

Following the pandemic, many people made the choice to move from cities to the more rural existence that Ilkley and the Wharfe Valley have to offer. Strong train and air links to the Capital are on hand for those who wish to split their time working from home and the office providing access to the best of both worlds.

We are pleased to confirm that strong sales continue, despite changes in the mortgage market, many clients identify property in the Wharfe Valley as a long-term investment and hope they will receive the benefit and enjoyment out of a new home now, with interest rates adjusting in the medium to longer term. Growth in sales is aided by families helping each other join the property ladder with private finances, those looking to move because of a growing family and clients downsizing to release capitol for family property purchases.

Sales are also bolstered by the time-honoured tradition of developing a strong pipeline, customer referrals, trust and great service which is the bedrock of Harrison Robinson’s success in the local marketplace.

Working from homers

We have many clients looking for a home with a spacious dedicated workspace, a garden office, or the opportunity to build one, therefore it certainly looks like working from home is here to stay.

We were honoured to receive an invite to join The Guild of Property Professionals recently. This has certainly helped our reputation and the help and services offered can only be a positive addition.

We at Harrison Robinson bespoke our service to suit each client, to create a stress-free environment from start to finish, whether downsizing or looking for that dream family home, we give our clients the time and space to come to the right decision on a property. Evidence suggests that often people spend less time choosing the right home than they do buying a car. Our team support our clients throughout and much handholding is available to find the right one.

Featured property: The Gables, Hag Farm Road – £3,750,000

NORTHERN IRELAND

STATS: Average House price in East Antrim: £178,025 Hunter Campbell have seen a modest increase in house prices over the course of the year of around 0.5% but with slowing momentum At end Q2, N. I House market had been bucking the trend with total transactions (2879 in total) – higher than in three previous quarters but indications that there is some slowing – await Q3 results (source university of Ulster Quarterly House price index)

HUNTER CAMPBELL ESTATE AGENTS
Nick White, Partner/Director

Although the past few months have been challenging there are certainly reasons to be cautiously optimistic as far as the housing market in East Antrim is concerned. Of course, recent month on month rises in interest rates has had a sobering effect on purchasers but this is on the back of an unexpectedly buoyant two years during Covid, so a bit of softening in the market was not unexpected and truthfully, neither were the interest rate rises.

Now with time to adjust, purchasers are coming to terms with the changes in mortgage rates but more importantly are beginning to see them level off and even a bit of competition for fixed-rate deals amongst lenders – and this coupled with a shortage of stock levels has managed to keep prices relatively static and augurs well for the future.

Demand from villages

All three branches situated in Ballyclare, Carrickfergus and Larne, report the same – we are seeing an increase in demand for properties in the outlying provincial towns and villages. This is in no small measure due to the trend of working from home and this trend is not confined solely to residents of Northern Ireland, as we have seen many purchasers either moving to, or back to, the province where a wide choice of homes in the country on a generous site yet coupled with convenience to all amenities is readily accessible. As to the rental market, on the lettings side of the business there continues to be a shortage of good quality homes and rental values have been rising. With the changes to tax relief available to landlords over recent years coupled with the increase in mortgage interest rates, many landlords have decided to sell up, placing an even greater strain on the private rental market. If, however you are a landlord looking to increase your portfolio, I honestly believe there is no better time. There is still good demand.

Featured property: Blackhead Path, Whitehead, Carrickfergus – offers around £495,000

The post Regional report appeared first on The Negotiator.

Base rate held at 5.25%, mortgage rates on the way down

Following 14 rises since 2021, the base rate was forecast by some to rise again on 21st September, to 5.5%, but it was actually held at 5.25%.

I was presenting at the 2023 International Property Care Conference at the time and literally jumped for joy – not easy after a knee operation! I still can’t quite believe rates reached above 5%, as it was obvious that was going to make buying a home for first-time buyers – the one sector that was driving the market this year – much more difficult.

Better still, the base rate hold appears to have had a good impact on mortgage rates, which have started to come down over the last few weeks, some even dropping below 5%.

According to the latest figures from Moneyfacts (9th October):

• The average 2-year fixed residential mortgage rate is 6.41%, down from 6.55% at the end of September
• The average 5-year fixed residential mortgage rate is 5.96%, down from 6.04% at the end of September

And Which? has reported, “Dozens of mortgages now below 5%”, with the ‘leading rate’ for home movers and FTBs coming from Virgin Money: 4.82% (fee: £1,295) for 60% or 75% LTVs. For those remortgaging, they quote Yorkshire Building Society, with a rate of 4.92% (fee: £1,495).

Borrowers need to take expert advice from a mortgage broker.

Although it comes with a large product fee – 5% of the mortgage cost – Skipton is now offering a two-year fixed rate mortgage for 3.35%, as long as you also have a 40% deposit. Clearly, borrowers need to take expert advice from a mortgage broker, but it’s certainly worth being aware that this option exists. (source: https://www.ftadviser.com/mortgages/2023/10/10/skipton-launches-3- 35-mortgage-to-support-borrowers/#)

And the latest forecasts from Capital Economics estimate that the base rate will fall to 4.75% towards the end of 2024 and as low as 3% by 2025.

Income growth still looking good

According to ONS data from May to July 2023: “annual growth in regular pay (excluding bonuses) was 7.8%, the same as the previous three-month period and the highest regular annual growth rate since comparable records began in 2001.”

Halifax points out that with strong wage growth comes improved affordability, with the house price to income ratio now at its lowest level since June 2020 (6.2 in September vs 6.3 in August). Although that’s not a big leap, it will help everyone afford higher mortgage payments.

Transactions picking up – but still a tough a market

Looking at the weekly transactions from TwentyEA, up until the base rate hit 5% in June, weekly net sales were running at just over 17,000 a week. Over the summer, sales dropped as low as 12,000 one week, but the latest data for the end of September shows that between weeks 38 and 39, sales were back up to nearly 16,000.

Have property price falls bottomed out?

We need a bit more time to declare this, but the year-on-year figures up until the end of September were comparing the relatively ‘good’ year of 2022 to a poor 2023. Data for October should, in theory, be comparing this year to the start of the market stalling at the end of 2022.

For example, Nationwide started to report monthly falls in October last year, and this year their stats show that although mortgaged property prices had fallen 5.3% year on year in August, they were no lower in September. Meanwhile, Rightmove reported that asking prices increased slightly, albeit by a margin that is “lower than is usual for this time of year”.

Of course, these are just some ‘snippets’ of good news, there are still plenty of headwinds that could derail not only a ‘recovery’ but a market that just stops falling. And, as ever, ‘market performance’ really depends on what’s happening at a local level and the type of property being sold – and only agents know that!

The post Braking the Bank appeared first on The Negotiator.

The headlines

Rightmove
Subdued August as market looks for autumn pick-up.
“As expected, the annual price change drops further to -0.4%, the biggest drop since March 2019.”

Home.co.uk
Prices wilt but marketing times remain below pre-Covid figures.
“Asking prices across England and Wales have slipped a further 0.4% since last month, although the year-on-year fall remains just -1.8%.”

RICS
Sales activity and prices remain under pressure due to elevated mortgage rates.
“Ongoing fall in national house prices gains momentum over the month.”

Nationwide
House price growth remained weak in September.
“Annual house price growth was unchanged at -5.3% in September. Prices were also flat over the month, after taking account of seasonal effects, following the 0.8% decline seen in August.”

Halifax
UK house prices fell again in September, but pace of monthly decline slows.
“Average house price fell by -0.4% in September, compared to -1.8% in August.”

Zoopla
Are buyers now ready to compromise?
“Annual UK house price inflation moves negative to -0.5%.”

Summary of key points from the indices

Rightmove

• The number of sales being agreed in August across all property types drops to 18% down versus August 2019
• The first-time buyer sector (two-bedrooms or fewer) is once again the best performing sector, with sales agreed down by 13% versus 2019.
• August was quieter than usual for new sellers, with the number of new properties coming up for sale being 6% lower than the ten-year average
• The five-year pre-pandemic average for the proportion of properties that have had at least one price reduction is 31.2%. That number has risen to 36.3%, which is the highest recorded since January 2011.

Nationwide

• Despite signs of demand for flats holding up a little better more recently, the price underperformance has continued in the most recent quarterly data, with flats seeing the largest year-on-year fall (-5.7%), compared to -3.6% for detached, -4.6% for semi-detached and -5.3% for terraced properties.

Halifax

• Property prices still up by +1.0% since initial Base Rate rise in December 2021.

Home.co.uk

• The typical time on market for unsold property in England and Wales increased by four days during August
• The current median is 84 days; in September 2019 the same measure was 96 days
• Stock levels of unsold property have risen overall but remain within the normal range for the seven years prior to the lockdowns.

Zoopla

• Profile of regional house price inflation linked to first-time buyer affordability and the relative cost of renting and buying
• Housing transactions still on track for 1 million completions in 2023
• Market activity continues to track in line with 2019 levels but remains well below levels of activity recorded over the more recent pandemic years
• Mortgage rates are starting to drift lower but remain over 5%. We expect them to fall below 5% later this year. Any further improvement in affordability from lower mortgage rates is unlikely to impact on the market until 2024 H1.

Regional house prices

Kate says: Some super-duper commentary on regional performance from several of the indices now – the big market stories today are the enormous regional differences, but Zoopla has produced the most amazing insight this month, showing why each region is so different.

Zoopla

“We believe that the variation in house price growth across the UK is partly explained by the ability of first-time buyers (FTBs) to buy at higher mortgage rates. FTBs account for 1 in 3 sales a year, most of whom originate from the private rental market. This means the dynamics of renting and buying will impact on demand and prices.”

“The experience for would-be FTB buyers varies across the UK. A renter buying the home they rent would find it cheaper to buy than rent in the six regions and countries with the lowest house prices.

“In Scotland and the North East average mortgage repayments are up to 18% lower than rental costs. This supports access to the housing market and the demand for homes.

“In contrast, it is more expensive to buy a home than to rent across all areas of southern England and Midlands. In London, the average monthly payment is 24% higher than the monthly rent. Higher mortgage rates are pricing more FTBs out of the sales market across southern England,.”

Nationwide

All regions saw annual price falls in Q3 “Our regional house price indices are produced quarterly with data for Q3 (three months to September) showing annual price declines in all regions.

“The South West was the weakest performing region, with prices down 6.3% year on year. Across northern England (which comprises North, North West, Yorkshire & The Humber, East Midlands and West Midlands), prices were down 3.9% compared with Q3 2022. The North was the strongest performing northern region, with the annual rate of change improving from -3.3% to -2.0%, while the East Midlands was the weakest, with a 5.5% decline. Meanwhile southern England (South West, Outer South East, Outer Metropolitan, London and East Anglia) saw a 4.8% year-on-year fall. London was the best performing southern region, although still saw a 3.8% annual decline.”

Halifax

“All UK nations and the nine English regions registered a decline in house prices on an annual basis. Prices are under the greatest downward pressure in the South East of England, falling by -5.7% over the last year (average house price of £376,450).”

House prices in towns and cities

Kate says: Overall, out of 30 cities, since 2005, property prices have risen above the average 3.8% inflation in 11 cities/towns, including Edinburgh and Leicester. All the remaining towns and cities, price growth has remained below inflation. Even with the price growth seen during the pandemic, what this shows is that, in real terms, especially for those that own a property outright, it isn’t necessarily delivering, from an investment perspective.

Demand and supply

Despite much of the media focusing on property prices, from a buyer’s/seller’s perspective, for the industry and indeed for the economy, what’s more important is the data we receive on transactions.

HMRC

“August is the third consecutive month to show a month-on-month increase in seasonally adjusted residential transactions. Seasonally adjusted transactions rose by 1% in August relative to July.”

Propertymark

“The supply of new homes placed for sale per member branch showed another positive uplift in August 2023 – now at an average of 13 per member branch. The average number of sales agreed per member branch remained static however, when compared to the month previous. The average number of properties available per member branch showed a positive climb to an average of 45 in August 2023 compared to 38 in July 2023. This represents the highest figure since pre COVID.”

Kate says: This data is becoming absolutely essential for any analyst and everyone working in the market that has to forecast their revenue and transactions moving forward.

As you can see from the charts, listings are pretty ‘average’ with listings for week 39 averaging over seven years at 34,000 and actually a bit lower for this year, but not far off at 32,649. So listings wise, we are ‘good’ but the market isn’t being flooded.

What is happening to sold properties is critical and the same analysis doesn’t look so good: the average over seven years is 25,420 sales in week 39, but drops to 21,535 this year – a fall of 15%. And, although mortgages are looking better, this is likely to last until the end of the year, even versus poor sales last year. We might see a bit of a boost for October (as last year we had the Truss catastrophe) but I’d be bracing myself for a poor November and December.

TwentyCI

“At the time of publishing, there were 640,016 residential properties for sale. This is 5,162 more properties than reported in August.

“There were 4,657 fewer properties Sold Subject to Contract than in August (422,370 compared to 427,027). However, exchanges increased with 11,233 more properties exchanged in June, July and August (203,588) compared to May, June and July (192,355).

“In September we traditionally see a post-vacation uplift. This is evidenced by the 1% increase in new listings compared to August. This month, the South East took the lion’s share, with 104,319 properties currently for sale. This was followed by the East of England with 71,198 for sale. The North West secured the third spot with 67,669 followed by the South West at 65,950 and Inner London closely behind at 65,896.” Zoopla Demand ticks higher off a low base “The decline in buyer demand over the summer has started to reverse. Enquiries to estate agents are up 12% since the August bank-holiday weekend. This improvement is off a low base – demand remains 33% lower than a year ago and in line with 2019. This uptick in enquiries is partly seasonal but also reflects improved consumer confidence, which is at a 2-year high, amid expectations of lower mortgage rates.

The big ‘hope’ is that base rates have topped out – if this is the case, then we may be looking at a more rosy 2024.

“Demand has improved in all areas, noticeably in southern England where enquiries for homes have been weakest in 2023. Demand is up 19% in the South East over the last three weeks and 16% higher in London.

“The number of new sales agreed has also increased and is closely tracking 2019 levels, supported by homebuyers having a much greater choice as levels of inventory return to pre-pandemic levels.”

Buyers unwilling to compromise

“Mortgage rates remain over 5%, reducing household buying power by over 20% compared to early 2022. Despite this, data on buyer enquiries shows home hunters are unwilling to make compromises on the size of home they are looking for. Share of buyer demand by property type and size is virtually the same as a year ago. There is a similar pattern for demand split by price band.

“There are some small regional variations with more demand for flats in London, for example, but the overall trend is buyers holding out for what they want. It seems many buyers are waiting for either a fall in house prices or mortgage rates. This is why sales volumes are set to be 20% lower this year and 28% lower for those buying with a mortgage.

“An unwillingness to compromise is a rational approach as buying a home is a big and expensive life event. Younger buyers are taking longer mortgages, to boost buying power, so they want to buy a home they are going to be happy in for a decade or longer.”

Where is the market going?

Kate says: The big ‘hope’ is that base rates have topped out – if this is the case, then we may be looking at a more rosy 2024, but I don’t think the fall in mortgages or inflation will have an effect this side of Xmas.

Zoopla

“We expect our index to record small month-on-month declines over the Autumn and end the year 2-3% lower than 2022. This would leave average prices 17% higher than Q1 2020, just before the pandemic.

“The modest reduction in house prices is not sufficient to boost affordability and support a recovery in sales volumes, even if mortgage rates were to dip below 5%. We should expect further modest downward pressure on prices over Q4 2023 and into Q1 2024.

“The housing market continues to adjust to higher borrowing costs. The more than doubling in mortgage rates since last 2021 together with increases in the cost of living represents a big adjustment for home buyers and the wider market.

“The impact on pricing has been modest compared to the scale of the hit to buying power. Forbearance by lenders, tougher mortgage regulations over recent years and a strong labour market appear to have moderated the stress in the market compared to previous cycles that would have driven larger price reductions.

“Some buyers are returning to the market this autumn, having delayed home moving decisions as base rates moved higher. Many others continue to wait on the outlook for mortgage rates while also holding out on their property requirements for their next purchase.

“The quicker average mortgage rates (for 5-year 75% LTV fixed-rates) move towards 4.5% or lower, the sooner we will see buyers return to the market. This currently seems more likely in 2024 than later this year.”

The post House prices survey – decline and Fall appeared first on The Negotiator.

STATS: Average time for a property to sell based on the last ten transactions: 31 days Average sale price based on the last ten transactions: £562,500 On average for us to secure a buyer for a property: 14 viewings

HARPERS ESTATE AGENTS
Max Rogers, Associate Director

The local property market in Buckinghamshire remains robust, with sustained interest from buyers seeking properties in desirable school catchment areas and picturesque countryside locations. Accurate pricing, considering market dynamics and buyer sentiments, is crucial for successful property transactions. The availability of properties for sale has significantly increased compared to the previous year. Our estate agency offers a personalised service, prioritising continuity and effective communication to ensure a smooth and satisfactory experience for both sellers and buyers.

We are finding it is currently taking 14 viewings on average for us to secure a buyer for a property. Furthermore, our average time from listing a property on the market to completion is around 5 1/2 months.

Attractive to Londoners

Buckinghamshire remains an attractive destination for buyers from London, with many seeking properties in areas with good school catchments and a desirable countryside lifestyle. The proximity to the capital, coupled with the allure of scenic surroundings and educational opportunities, contributes to the continued demand from buyers.

The market in Buckinghamshire, as with the rest of the country, remains highly price sensitive, emphasising the importance of accurate pricing to lead to successful property transactions. A key consideration is that sellers often base their price expectations on previous market conditions (2020-2022), while buyers are more conscious of rising interest rates and other cost of living pressures.

Compared to the same period last year, the availability of properties for sale has significantly increased. In August of last year, there were 210 properties available for sale, whereas this year, the number has risen by 72% to reach a total of 361 properties. This surge in stock provides buyers with a wider range of options to consider.

Our estate agency specialises in a bespoke individual approach, ensuring that sellers and buyers receive personalized service. By dealing directly with a single point of contact, clients can avoid potential communication and continuity issues that may arise when dealing with multiple staff members. This individualized approach fosters effective communication and enhances the overall customer experience.

Featured property: Brook House, Wendover – £1,25 million

NW WALES

STATS: Average time on sale: Auction four to six weeks from on market to exchange Average sale price: £148,038 Number of transactions (or going under offer) in past four weeks: We conduct a collective auction every month

WILLIAMS & GOODMAN THE PROPERTY PEOPLE
Melfyn N Williams, Senior Auctioneer and Director

Williams & Goodwin The Property People Ltd operates in North West Wales covering primarily the counties of Anglesey & Gwynedd but also through our auction brand All Wales Auction the whole of Wales.

While the property market in general now appears be slower than 12 months ago, to many it has merely returned to ‘normal activity’. Each area will be indirectly affected by the global or national economy however each area will also have its own dynamics and local market forces. In general terms the rental market remains buoyant.

Perhaps partly as a result of Welsh Government intervention that has had unintended consequences, perhaps partly down to the cost of living and higher mortgage rates and perhaps down to a lack of stock in the rental market that just isn’t there to meet demand anymore as many landlords had just had enough of Welsh Government tinkering who appear to many as having turned their backs on the private rental sector and created an unfair, unbalanced scenario. That said, those landlords deciding to remain, are now able to demand higher rents and gain a better return on their investment to try to combat the additional regulations and costs of supplying a rental sector which as yet, has not been replaced by government with social housing.

Correctly pricing property

Sales activity has slowed down, prices now need to be ‘current’ and correctly priced property with the right method of sale adopted to suit the individual needs of the seller is still an attractive proposition to buyers and investors. Marketing periods to secure sales will return to normal times for our area and it’s good to see that despite all that’s reported in the media, at Williams & Goodwin the average time to exchange is still well below the national average of around 14 weeks.

Being a traditional local estate agency with national connections we also have the advantage of a specialised auction department that has been operating for over 22 years. As many will know, auction is not a last resort and has proved extremely successful with many of our lots selecting the auction route as first choice to market with a 97% success rate and prices on average exceeding price guide in 2023 by 51%.

Featured property: Llaneilian Anglesey – Auction guide price £110,000

DORSET

Average selling price: £640,000 Number of properties currently on the market: 147 Number of transactions in the past 4 weeks: 32

DOMVS
Polly Greenway, Owner

In recent weeks, we have noticed that both buyers and sellers are being more indecisive. With less urgency on both sides, the market is somewhat slower and now requires a little more patience and a lot more determination. Something that we believe, only a seasoned estate agent has the experience to navigate.

On average, a house is now being viewed three times before an offer is made – unlike this time last year, where it wasn’t uncommon to receive an offer after just one viewing. Likewise, buyers are aware that the market is more in their favour and so negotiations are somewhat tougher.

The number of active buyers on our books remains comparable to last year however, we have significantly increased our portfolio of available properties, and so the supply and demand ratio has reduced by a little over 50%. That said, while the market is cooler, we still have a healthy 25 buyers registered for every property.

Conveyancing

If properties are priced to sell, they are still being snapped up in a matter of weeks, albeit facing challenges of a prolonged conveyancing period, mostly due to arranging finances in a timely manner. In these situations, we have found having a dedicated conveyancing team invaluable and they are working hard to push tricky deals across the completion finish line.

Unsurprisingly, we have also noticed an increase in the disposal of other assets. For example, we have just sold a beach hut (for a record price) on behalf of clients wanting to release funds. And we are speaking to a lot of second-home owners who are considering their options in the current market.

All-in-all, the market is requiring a ‘sleeves rolled up’ approach, which suits us, as we know it sorts the wheat from the chaff and helps us to increase our market share.

Featured property: Buckland Newton – offer over £2,300,000

The post Regional report appeared first on The Negotiator.

Kate Faulkner

There is plenty of different transaction data being reported from mortgages to properties sold subject to contract and finally sold. And for anyone looking for a big headline, it’s looking scary from a year-on-year perspective.

Sales over the last two years were much higher than normal. 2023 was never going to be great.

HMRC transactions

Non-seasonally adjusted figures are down 22% relative to July 2022, whilst seasonally adjusted figures are down 16%.

Mortgage transactions

The number of mortgage approvals seen during the first six months of this year totalled just 291,578, 29% less than the 410,244 approvals seen during the first half of 2022.

But! There is no point comparing sales from 2023 to 2022 or 2021

For anyone forecasting this year, hopefully everyone appreciated that sales over the last two years were much higher than normal and 2023 was never going to be a great year from a transaction perspective. Savills has predicted 870,000 sales versus the norm of 1.2 million, while Zoopla were more positive with a view that 1mn sales would be achieved. This would be a forecast of 17% or 30% – a big difference!

Up until base rates hit 5%, according to Christopher Watkin and TwentyEA’s data, sales, when compared to more ‘normal year’ averages of 2017 to 2019 were down by pretty consistently by 6%. However, as soon as rates rose to 5% and now to 5.25%, sales starting dropping year on year quite dramatically.

Analysing their data (updated a week in arrears) sales from July 2023 were 7-8% down while August saw higher falls between 11-14%.

If we assume a fall of 6% versus the 1.2 million ‘norm’ up until the end of June and project forward a 15% fall from July to the end of the year, that would mean transactions could achieve 1.1 million, higher than both Zoopla’s and Savills predictions. However, it’s probably right to expect that Zoopla’s forecast of 1mn transactions this year will be accurate, meaning we are in for a tough rest of the year transaction wise.

Transactions depend on buyers, affordability and property type

The difficulty is, just like with prices, some areas are suffering a lot more than others. Feedback I am getting ranges from ‘we are still doing OK’ through to ‘the market is dead’. The reasons for this vary, but they depend on affordability, levels of mortgage activity versus cash buyers in an area and the type of buyer, be it first timers, movers or investors.

Who is still buying and what property types are they looking for?

Nationwide have some great data this month explaining what’s happening in more detail – comparing cash to mortgage transactions, looking at who is buying and what property types are doing well.

For those who have been through difficult property market times before, it will be no surprise that cash transactions are, according to the Nationwide “more resilient”. They are reporting that in the first half of 2023 the number of completed transactions were:

1.  Nearly 20% below pre-pandemic (2019) levels
2. 40% lower than in the first half of 2021 (although this was a higher than average year for property transactions)

This is very much mortgages though, which have fallen much more than overall sales. The chart below shows how cash buyers in the first half of this year are slightly up versus 2019, while first time buyers have fallen the least, followed by BTL investors and home movers.

In terms of property type, Nationwide analysis shows “For owner-occupiers buying with a mortgage, there has also been a modest shift in the type of properties being purchased. While transactions are lower than pre-pandemic levels across all property types, the biggest decline has been in detached houses.” And as a result the buyers that are still active are coping with the higher mortgage rates by looking at “smaller, less expensive properties.”

Really understanding the market, who is buying and who is still selling is crucial for the industry this year. Taking on properties that are not likely to have a buyer or are overpriced will be too costly, especially for agents. Targeting cash buyers and first-time buyers with smaller properties may be the key to keeping things going this year – but as always it depends on your area!

The post Transactions are telling appeared first on The Negotiator.

Rightmove
1.9% summer price drop as stretched affordability begins to improve. Average new seller asking prices fall by 1.9% (-£7,012) this month to £364,895, the biggest fall in August since 2018, as summer sellers tempt buyers preoccupied by holidays, inflation, and the highest Base Rate since 2008.”

Home.co.uk
Prices hold firm in the North but slide in the South. “Asking prices across England and Wales have taken what could be regarded simply as a seasonal dip of 0.3% since last month, although at the same time rising mortgage costs are inevitably dampening vendors’ expectations, most notably in the South.”

RICS
Tighter lending environment continues to weigh heavily on home buyer activity. “National house price indicator retreats further over the month.”

Nationwide
August sees further weakness in house prices. “August saw a further softening in the annual rate of house price growth to -5.3%, from -3.8% in July, the weakest rate since July 2009. Prices fell by 0.8% over the month, after taking account of seasonal effects.”

Halifax
UK house prices fell in August as impact of higher rates flows through. “On an annual basis prices fell by -4.6%, the biggest year-on-year decrease since 2009, though it should be noted that this is relative to the record-high property prices seen last summer.”

Zoopla
Annual UK house price inflation slows to +0.1%, lowest since 2012.“While house price growth has slowed rapidly over the last year, the primary impact of higher mortgage rates has been lower sales volumes.”

Kate says: Reading the reports and headlines this month, it’s really important to remember where the data is coming from and making sure the headlines match. For example, the Nationwide and Halifax falls are being reported as ‘house prices are falling by….’ But that isn’t accurate, they are reporting mortgaged property prices ONLY.

Average house prices are still 19% higher than pre-pandemic.

Bearing in mind that 30%+ sales are cash, in my view it is incorrect to say ‘house prices’ are up or down by xx%, mortgaged property prices maybe, but cash sales can and are reacting very differently!

Key points from the leading indices

Rightmove
Despite the ‘doom and gloom’, Rightmove reminds everyone that average prices are still £59,000 (19%) higher than in the pre-pandemic market of August 2019.

“The average five-year fixed mortgage rate is now 5.81%, falling from 6.08% this time just three weeks ago and currently showing signs of an improving trend.

“A key factor preventing more significant price falls so far this year is that the number of available properties for sale remains historically constrained and is currently 10% lower than in 2019.”

Nationwide

“In the first half of 2023, the number of completed housing transactions was nearly 20% below pre-pandemic (2019) levels and c.40% lower than in the first half of 2021 – though the latter reflects the boost to activity from pandemic-related shifts in housing preferences, the Stamp Duty holiday and ultra-low borrowing costs.

“Home mover completions (with a mortgage) in the first half of 2023 were 33% lower than 2019 levels, whilst first-time buyer numbers were c.25% lower. Buy-to-let purchases involving a mortgage were nearly 30% below pre-pandemic levels. By contrast, cash purchases were actually up 2%.”

Halifax

“Income growth has remained strong over recent months, which has seen the house price to income ratio for first-time buyers fall from a peak of 5.8 in June last year to now 5.1. This is the most affordable level since June 2020, and will be partially offsetting the impact of higher mortgage costs.”

Home.co.uk

“Key indicators such as marketing times and stock levels continue to weigh in lower than observed in pre-COVID years 2018 and 2019. Meanwhile, following the December 2022 drop, pricing remains relatively firm overall with no notable increase in price-cutting of on-market properties.

“The Typical Time on Market for unsold property in England and Wales increased by just two days during July, consistent with seasonal expectations. The current median is a relatively healthy 80 days, which is considerably lower than at any point during pre-pandemic 2019.

“The supply rate of new instructions entering the market remains very restrained: down 2% vs. July 2022 and don 4% vs. July 2018. The largest year-on-year rise was in the East of England (+5%).”

“Looking at the real home price growth chart, we can clearly see that significant falls in real terms began around April 2022 and a major price correction has been taking place ever since, with the greatest monthly falls around March this year.”

Zoopla

“Market activity continues to track in line with 2019 levels but remains well below levels of activity recorded over the more recent pandemic years.

“All regions across southern England are registering year-on-year price reductions of up to -1%. All other regions and countries of the UK are posting low, single digit price growth. Scotland is registering growth of +1.7%.

“Our view that price reductions will remain concentrated across southern England where affordability challenges are greatest. Lower house prices and mortgage rates are needed to stimulate demand and sales.

“Our data on the number of homes being sold ‘subject to contract’ over the year to date shows the market is still on track for 1m sales completions in 2023.”

Regional property prices

Kate says: The property market is typically very difficult to report on ‘in summary’, especially when it’s ‘going up’ and ‘going down’ as what’s happening is so individual to a property not just to an area. Prices then depend on whether you are buying with cash or a mortgage, so even regional reporting isn’t likely to be that helpful to buyers, sellers and investors.

Add to this, as all the indices measure the market at different times and in different ways (some UK, some England and Wales, some mortgaged only) their reports of prices being up and down are all over the place just now and it will take a few more months until we see some consistent reporting across the indices. Hence, the North East is being reported as up by 4.7% according to the Land Registry, up by 2.6% (Rightmove), up by 1.8% according to Home but down by 3.3% according to the Nationwide. A range of price reporting from -3.3% to 4.7% is huge!

However, the main ‘summary’ that you can conclude from the regional data is that areas which are typically high priced and require a mortgage are suffering a lot more, hence the ‘north-south divide’ is coming back into play.

It’s important to constantly remind local media, buyers and sellers that whatever is being ‘reported’, within each region, prices are likely to be going up, down and staying the same, or at least the last the two just now!

Zoopla

Southern regions register the larger price falls

“There is a clear north-south divide in house price inflation. All regions across southern England are registering year-on-year price reductions of up to -1%. All other regions and countries of the UK are posting low, single digit price growth.

“This pattern of price changes reflects the greater impact of higher mortgage rates on higher-value housing markets. Buyers in southern England need larger mortgages, bigger deposits and higher incomes to buy. This prices more buyers out of the market, weakening demand and pushing down prices.”

Prices holding up where FTBs can still buy

“We believe that the variation in house price growth across the UK is partly explained by the ability of first-time buyers (FTBs) to buy at higher mortgage rates. FTBs account for 1 in 3 sales a year, most of whom originate from the private rental market. This means the dynamics of renting and buying will impact on demand and prices.

“Low mortgage rates over recent years made mortgage repayments for buying much cheaper than renting. This supported FTB demand and led to many FTBs opting to buy 3+ bed homes, bypassing the market for flats and smaller houses. Mortgage rates over 5% have now reversed this trend at the national level, making renting 10% cheaper than buying at a UK level, despite high growth in rents in recent years.

“However, the experience for would-be FTB buyers varies across the UK. A renter buying the home they rent would find it cheaper to buy than rent in the six regions and countries with the lowest house prices. In Scotland and the North East average mortgage repayments are up to 18% lower than rental costs. This supports access to the housing market and the demand for homes.

“In contrast, it is more expensive to buy a home than to rent across all areas of southern England and Midlands. In London, the average monthly payment is 24% higher than the monthly rent. Higher mortgage rates are pricing more FTBs out of the sales market across southern England, reducing demand and compounding the downward pressure on house prices.

“The actual position is worse for all FTBs when allowing for the fact that mortgage lenders require new borrowers to be able to afford higher ‘mortgage stress rates’ of closer to 8.5% rather than the product rate of 5.6% used in this analysis.

Towns and cities house prices

Kate says: Overall, out of 30 cities, since 2005, property prices have risen above the average 3.8% inflation in ten cities/towns, including Manchester and Milton Keynes, on par with inflation is Tunbridge Wells. All the remaining towns and cities, price growth has remained below inflation. Even with the price growth seen during the pandemic, what this shows is that, in real terms, especially for those that own outright the property, they have isn’t necessarily delivering from an investment perspective.

Demand and supply

HMRC

“July is the second consecutive month in which we have seen a small increase in seasonally adjusted transaction figures. Seasonally adjusted residential transactions are up 1% relative to June.”

Figure 1: Non-seasonally adjusted and seasonally adjusted UK residential property transactions by month between July 2020 and July 2023.

Propertymark

“The supply of new homes placed for sale per member branch showed a positive lift in July – now at ten per member branch. The average number of sales agreed per member branch also showed an uplift to eight in July. The total stock of properties available per member branch climbed slightly to an average of 38 in July compared to 32 in June. Properties available for sale show a 37 per cent jump year on year and prove to be at their highest level across the last twelve months. This is proving that resilience and determination to move home remains within the market.”

ales fallen since rates hit 5%
(Data from Christopher Watkin and TwentyEA.)

“As you can see from the chart below, new instructions are actually holding up pretty well this year. What we aren’t seeing is a huge rise in listings due to a fear of mortgage rises nor are we seeing huge amounts of sellers holding off putting their property on the market now it has slowed. So currently, on a listing basis, things are ‘pretty normal’.

“From a sales agreed perspective (the pink line), not surprisingly this shows that we aren’t selling as many properties as we have by this time in previous years and are certainly heavily down year on year. Cumulatively we are still only down by 6% versus ‘more normal’ years from 2017 to 2019, which considering the cost of living crisis and the mortgage rate rises is amazing.

“However, we saw an immediate drop in sales the week after bank base rates hit 5% and with the current 5.25% rate and this is definitely causing a much tougher market slow down than we’ve seen so far this year.

“This is reflected sales wise in week commencing 21st August. Versus 2017 to 2019 sales are down from an average of 23,266 for the week to 20,304, which is double the previous dip we’ve seen: 12.7% fall vs 6% to date.”

TwentyEA

“At the time of publishing, there were 634,854 newly instructed properties on the market. This is 1,047 fewer than reported in our July Pulse.

“There were 1,019 more properties Sold Subject to Contract than in July (427,027 compared to 426,008). There were also 9,671 more properties exchanged in May, June and July (192,355) compared to April, May and June (182,684).

“In July, the South East led the way once again, reporting 103,747 available for sale. This was followed by the East of England with 70,597 for sale. The North West surpassed Inner London in July, registering 67,158 for sale, compared to Inner London’s 66,856.”

Nationwide

Cash transactions proving more resilient in a sluggish market

“In the first half of 2023, the number of completed housing transactions was nearly 20% below pre-pandemic (2019) levels and c.40% lower than in the first half of 2021 – though the latter reflects the boost to activity from pandemic-related shifts in housing preferences, the Stamp Duty holiday and ultra-low borrowing costs.

“An examination of the composition of transactions reveals that cash purchases, though down from the 2021 highs, have been remarkably resilient, while purchases involving a mortgage have slowed much more sharply.

Where is the market going?

Kate says: I predicted a slowdown in the market over the summer and that’s definitely happened. I think that we’ll see a little more activity September/October, especially with the more competitive mortgage rates released over the last few weeks. If we have ‘peaked’ rate wise, that will definitely help the market recover, but I do expect November and December to be pretty quiet as more homeowners end up paying higher mortgage rates, people will face still high energy and food costs and are likely to focus on getting through Xmas rather than moving home.

RICS

“Looking ahead, national price expectations remain negative at both the three and twelvemonth time horizons. For the year ahead, a balance of -49% of contributors anticipate a further fall in house prices. While the latest reading is identical to last month’s figure, it denotes a considerable dip relative to the flat reading of -3% returned in May prior to the most recent shift in interest rates.”

Nationwide

“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks.”

Zoopla

While first-time buyer numbers will be lower in 2023, we expect them to hold up as a result of more flexible working opening up options to buy in cheaper markets as well as buying costs being lower than renting in more affordable markets. In addition, more landlord selling previously rented homes, which are typically priced 25% lower than the wider market, is boosting available supply that appeals to FTBs.

“Mortgage rates are starting to drift lower but remain over 5%. We expect them to fall below 5% later this year but it looks set to be a drawn-out process as the financial markets re-evaluate how much longer interest rates need to remain higher to bring inflation under control. Any further improvement in affordability from lower mortgage rates is unlikely to impact on the market until 2024 H1.

“While house price growth has slowed rapidly over the last year, the primary impact of higher mortgage rates has been lower sales volumes. Our data on the number of homes being sold ‘subject to contract’ over the year to date shows the market is still on track for 1m sales completions in 2023. This will be 21% down on 2022 levels and the lowest number of sales since 2012. It’s the equivalent of the average household moving once every 23 years.”

The post Holding up appeared first on The Negotiator.

STATS: Average house price: £1260pcm Average time on market: 1-2 weeks Leaders in the market for new instructions YTD

HF LETTINGS
Georgia Burrows, Senior Lettings Manager

With our distinctive branding and market reputation HF Lettings has built a successful and award-winning business over the last 16 years. With offices in Corsham, Wiltshire and Tetbury, Gloucestershire, our portfolio comprises historic manor houses set in quintessential English villages and towns to modern family homes and city apartments and everything in between!

Landlords and tenants are our first consideration, and our specialist team is devoted to meeting their needs.

Quintessential Cotswolds

Our Corsham office covers not only the town itself but several villages and towns around and beyond including Chippenham and Bath. Our Tetbury office also covers surrounding villages and towns including quintessential Cotswold villages and larger market towns. We captivate a variety of Landlords and Tenants by being in the heart of the Cotswolds and on the edge of The Five Valleys. We have many Landlords on large estates with homes within their communities, giving tenants looking for the countryside living, a real feel to what it’s like to live in The Cotswolds.

Whilst we are experiencing reduced stock, compared to a couple of years ago, we are still attracting quality tenants and our properties are renting on average within one to two weeks. We are especially mindful of the current economic climate and are working with landlords to ensure that their properties are achieving fair market rents whilst also appreciating that their costs are also rising. Currently we are looking at between a 6% and 10% increase on yearly rents which is proving manageable for both tenants and landlords.

We are often asked should I sell? Our answer is always to keep the investment if it is possible to do so. The long-term gain is often worth the short-term pain! There will always be a need for quality rental properties and with our proximity to Bath, Bristol and the M4 and M5 Corridor, we do not see this need diminishing. We are also experiencing an increase in the number of individuals looking to relocate from city living. With a fast train link from Chippenham and Kemble to London Paddington it is becoming increasingly attractive to those professionals who have embraced the WFH revolution.

Featured property: 2 Box Cottage, Sutton Benger – £1,850pcm

COOKSTOWN, ULSTER

STATS: Mid Ulster average house price is around: £167,500, an increase of approx. 5% this year Last quarter price increase of: approx. 1.8%, even with a slow market Average time on sale: 40 days

STANLEY BEST ESTATE AGENTS
David Best, Partner

The property market in Cookstown and Mid Ulster area remains challenging although steady. The first-time buyer market has slowed considerably, and I feel this bracket has been the most affected by the substantial mortgage rises over the last six months. Buyers are saving for larger deposits, which are required by most lenders, though the larger monthly payments are pricing a lot of these buyers out of the market for now. It’s a difficult time as we see buyers asking for advice and wanting to buy which is positive. When the rates steady, we hope they will be back to us to find their first home. In our area the second and even third time home buyers are buying and selling which is keeping the market moving, which is great news for us. Yes, they are affected as well with the larger mortgage repayments, but with many having good equity in their previous property they generally are very motivated buyers.

Here at Stanley Best Estate Agents, we specialise in all things property from residential and commercial sales to residential and commercial lettings. During the last 10 years we have concentrated on the New Builds, working closely with developers – from initial planning ideas to the final construction of their properties. We have been fortunate to retain a large market share of New Build in our area in recent times, which is a massive help for our small family business. In good and difficult times New Build properties will always sell.

60 years of experience

Stanley, after working for an auctioneering and estate agent company for 16 years, opened his office back in May 1980, and has now been trading for over 43 years and is the longest serving estate agent in our area. I, David, Stanley’s son, joined the firm back in 2008 after finishing High School in Cookstown and became a Partner back in 2014 – now jointly totalling almost 60 years of experience in the property business in Mid Ulster. When it comes to buying and selling your property, we find the experience and results speak for themselves. We always go above and beyond for our clients, after all your home is the biggest asset you will ever own.

Featured property: 66 Annaghone Road, Cookstown – £395,000

DONCASTER, SOUTH YORKSHIRE

STATS: Average sales price: £180,000 Average lettings price: £850pcm Average time on sale : 2 weeks

MOSS PROPERTIES
Victoria Brooks, Client Manager

The Doncaster property market has witnessed a steady increase in both demand and prices over the past few years. The average property prices in the area have experienced a healthy rise, making it an attractive location for first-time buyers, investors, and families seeking affordable housing options within commuting distance of major cities. The town offers a diverse range of properties, including Victorian terraced houses, modern apartments, and spacious family homes, catering to various budgets and preferences.

Factors Directly Affecting our Market:

Regeneration Projects: Doncaster has seen significant investment in regeneration initiatives, such as the ongoing transformation of the city centre and the development of key sites like the Waterdale and Civic Quarter. These projects have not only enhanced the local infrastructure but have also contributed to the growth of the property market, attracting both buyers and investors.

Transportation Links: Excellent transportation links play a crucial role in driving the demand for properties in Doncaster. The city benefits from its proximity to major road networks, including the A1(M) and M18, facilitating easy access to cities like Sheffield, Leeds, and Nottingham. Additionally, Doncaster Railway Station offers direct train services to London, making it an appealing location for commuters.

Educational Facilities: Doncaster boasts a range of reputable schools and colleges, making it an attractive choice for families.

The presence of quality educational institutions often influences property buyers’ decisions, leading to increased demand for homes within catchment areas.

As a leading, award-winning estate agency in Doncaster, we specialize in a wide range of property services, including residential sales, lettings, property management, and property valuations. Additionally, we cater for buy-to-let investors, who are looking for properties with attractive rental yields. We as an agency offer a bespoke service to cater to the diverse demands of buyers, sellers, tenants, and landlords. Supporting our clients throughout their property journey.

Featured property: Blossom Crescent, Balby – £1,100pcm

The post Regional report appeared first on The Negotiator.

While the Independent reports “UK house prices fall for fourth month running – here are the areas most affected”

and the Telegraph suggests that “Britain suffers biggest housing downturn since financial crisis”

But, as we know, the fuel for many of these headlines is twofold – firstly typically very large geographical areas which are meaningless to individual buyers and sellers and secondly for me, the belief that ‘doom and gloom about property ‘sells content’ rather than ‘good news’.

Kate Faulkner

A more balanced approach, which would be super helpful to buyers and sellers and those very nervous about re-mortgaging, would be to show areas that are doing well too, educating people to find out what’s happening in their local markets, before deciding to buy and sell.

But in the absence of this, it’s really important for local property market experts to shout about what is selling and what’s good value to help keep the market going. This isn’t out of selfishness, we need to make sure that people aren’t ‘scared off’ from moving who need to due to their personal circumstances, for no reason.

Which areas and property types are doing well?

As our monthly property price report shows, FTBs have, up until the last few months, been pretty active in the market, as have cash buyers. According to Rightmove:

“The numbers of sales agreed in June in the mid-market second-stepper sector and the top-of-the-ladder sector are 14% behind 2019’s level.

“Smaller home, two-bedrooms and fewer market sector has been less impacted, with June’s sales agreed figure 9% below 2019’s level.”

However, the news gets even better for some, according to the latest RICS survey. Although the media often quote the ‘generic’ information from this survey, what I love is the individual comments from the surveyors you find at the back of the report.

Properties doing well

In their latest UK Residential Market Survey, the following comments show that some areas and property types are still doing well. In Yorkshire and the Humber, most of the surveyors, such as Ben Hudson, Hudson Moody, York, are reporting a ‘steady market’ and one that is ‘more resilient’ than suggested by the media. James Watts, Robert Watts Estate Agents, Cleckheaton, points out that it is ‘surprisingly resilient up to £250,000’.

North West, Martin Davies, Countrywide Surveyors, Nantwich says: “Houses prices have remained surprisingly resilient to recent mortgage rate increases and the cost of living crisis, particularly at the lower end of the market. This is due in part to a continual shortage of houses available for sale.”

East Midlands, Peter Buckingham, Andrew Granger & Co, Market Harborough: “Prices are holding reasonably well in certain price brackets due to lack of properties for sale” and Tom Wilson, King West, Stamford says “With vendors showing increasing pragmatism in the face of buyers looking for deals, activity has been encouraging.”

No-one knows better than a local agent, working at the coalface.

In East Anglia, David Ousby, Borough Council of King’s Lynn and West Norfolk, Kings Lynn points out that it’s not all about buying and selling: The “PRS market demand very strong, significant demand for all property types, especially newer 2-4 bed house.”

Rupert Merrison, Dexters, London: “The market in London remains busy despite what you might read. Buyers recognise that current mortgage rates are the new norm and are pressing on with their moves.”

Marion Currie, Galbraith, Dumfries & Galloway: “The summer continues in a steady manner, some buyer caution is evident but, still seeing a healthy number of sales at solid prices.”

Samuel Dickey, Simon Brien Residential, Belfast :“The market continues at a strong pace with values holding up despite the interest rate increases.”

Thomas O’Doherty, Simon Brien Residential, Belfast: “The market has remained resilient despite the wider negative reports on other regions of the UK.”

Post code lottery

In addition, TheAdvisory gives even more detail of areas that are doing well. Currently, of their top 25 postcodes, in BS7 75% of properties on the market are under offer, through to 66% in RG22. Others doing well are BS7, NE7, BS5, BS4, S8, BS3, BS2, M21, S9, BS15, CV31, BN42, KT9, B25, BS6, BS11, S12, BD18, WV12, RG31, BS16, M20, CB4, M33 and RG22.

But the reality is that no-one knows better what’s doing well than a local agent working on the coalface. So, if you have properties in certain streets that are still selling well, it’s worth shouting about – either on social or in the traditional media.

The post Behind the headlines appeared first on The Negotiator.