How will the property market react to recent interest rate rises?
Welcome to our monthly market update where we delve into the latest happenings in the real estate market. In this edition, we will decipher the multitude of news headlines and provide insights into price expectations for the upcoming weeks and months.
New Instructions Surge
One of the notable trends we observed in June was a significant increase in new instructions. In our business, we experienced a 15% rise in new listings, while the region saw a 6.5% increase in available properties. These numbers highlight a noteworthy shift in seller behaviour.
We believe this shift can be attributed to sellers moving away from self-serve online models, such as Strike and Purplebricks. Recognising the challenges posed by the current market, sellers are now seeking professional agents who can provide dedicated services to navigate the complexities and ensure successful transactions. This change has played a crucial role in reshaping the market dynamics.
Sales Rates Remain Steady
Despite the challenging market conditions, sales rates have remained relatively stable. The substantial increase in property reductions indicates sellers' awareness of the prevailing challenges. However, the number of properties sold has shown no significant change compared to the same period last year. This resilience is a testament to the continued enthusiasm and determination of buyers to make their next property move.
Price Stability Amidst Predictions
The predictions of substantial price drops ranging from 10% to 20% have not materialized thus far. Reports from Nationwide indicate a mere 0.1% increase in prices, while Rightmove's asking price index shows virtually no change, with prices even experiencing a slight decrease of £82. The Halifax index, albeit slightly outdated, indicates a 0.1% decline in prices in April. Overall, our estimation suggests that prices have fallen by 2% to 4%, depending on the location. However, these price adjustments may not be easily noticeable to most individuals.
Looking Ahead
As we look ahead, it is crucial to consider the three pillars of the property market: supply, demand, and external factors. Supply-wise, although there has been an increase in properties coming to the market, there is no overwhelming surplus. Additionally, housebuilders have responded by slowing down construction, resulting in a limited supply.
On the demand side, rising interest rates have had an impact, granting buyers more control in the market. However, certain areas, particularly thriving cities like Leeds, continue to experience strong demand. It is also important to note the influence of external factors, such as geopolitical tensions and the lingering effects of previous government policies.
