How Are Falling House Prices Affecting The Property Market?

Welcome to this month’s market update. In this update I am going to cover what we have seen across the market in July and will react to the change once more in interest rates and how we see this impacting the market now and through the rest of this year.

Manning Stainton

A Balanced View

Before I get into the video for this month, I just want to respond to a couple of comments received over the last few months. Now you may think that my positivity is a bit one-sided, but I want to assure all those watching that what we have and will continue to do is provide a balanced view of what’s happening in the market across our region. I may come across as positive in my approach but that’s just the nature of who I am and how I see things having listened to the predictions of doom for so many years fail to come true

The Headlines

July - A month that will usually signal the start of a summer slow down as the kids break up from school and people head away for a much-deserved break.

July of 2023 appears to be exactly that and here are some headlines:

  • New properties brought to market pretty much the same as any previous years (outside of the boom period)
  • The number of sales agreed again broadly the same as we would have seen in years past.
  • However – we mustn’t ignore the biggest trend happening in the market right now and to illustrate this let me put up a few charts using data from a national provider called Twenty EA.
    • The first shows the number of new listings across the entire Leeds & Wakefield region over the last three years. We can see this is broadly unchanged albeit 2023 has been a stronger year overall.
    • The second and more critical shows the number of price changes or reductions across the market. And here we can see a very important trend with these pretty much double what they were a year ago.
      • For some, it will be pretty hard to accept they have missed the peak and so have still priced as things were a year ago. The most important thing for those who are motivated is to get the price right now and not chase the market down over the coming months.

The House Price Index

Ok so on prices…

  • Nationwide is now tracking prices at 3.8% lower than a year ago.
  • Halifax at the time of filming hadn’t brought out their July index but I would predict it shows a similar trend to Nationwide.
  • And the Land Registry whose data is always lagging way behind showed no movement in May but keep in mind this is from sales agreed right at the start of the year. We will start to see falls on this measure coming through in the months ahead.

In Our Region

So how do we see it? Well in last month's update, I said that we felt prices had adjusted (or fallen) by around 2 to 4 % annually. As of the end of July, I would update that to now be more like 4% to 6% again depending on where in the region you are.

There can be no doubt that moving forward we are seeing an impact from rising interest rates which is restricting people's ability to borrow.

The Fundamentals

As mentioned in last month's update the fundamentals remain as they were and these will avoid the big crash in prices that many are still predicting.

  • Population growing with demand across the market remaining resilient. Rightmove still saying buying registrations are 3% higher than in 2019.
  • A general shortage of stock across not just this region but almost every region in the UK to satisfy the demand that exists.
  • Lenders are still there with money to lend albeit at higher rates.
And so we await the end of summer and what is often regarded as the second busy phase of the year in September to see how the market continues to respond and as always we will keep filming these videos to keep you up to date.

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