Property Prices Update: Are We Approaching a Soft Landing?
The summer months have always been an interesting time for the real estate market. Traditionally, it's a period when the market tends to slow down as people head away for vacations and enjoy the warm weather. However, this summer brought some unexpected twists and turns to the property market. In this blog post, we'll delve into the August property market update, exploring recent trends, sales volumes, and the burning question on everyone's mind: Are property prices on the verge of a soft landing?
August Property Market Overview
August is often considered a quiet month for the property market, but this year was an exception. The number of properties that came to market during August was the highest we've seen since August 2020 when the world was emerging from lockdown. This surge in listings suggests that many people still view this as an opportune time to buy or sell properties.
Sales Volumes and Market Demand
One crucial indicator of market health is sales volumes. When we examined the data, we found that the volume of sales agreed during August was quite similar to what we would expect in a typical year. While the past year has been anything but typical, these sales numbers resemble what we saw in 2018 and 2019.
What's driving these sales? One significant factor is the number of price reductions happening in the market. Agents are continuously reintroducing properties at new, more competitive prices. This strategy has kept sales rates relatively steady despite the ongoing fluctuations.
The Price Dilemma
Now, the big question: Are property prices falling? It appears they are. According to our average price indexes, prices have dropped approximately 6% compared to the same period last year. However, interpreting these indexes can be tricky because they often reflect transactions that occurred several months ago.
The latest data from various sources provides a mixed picture. The Land Registry's June report showed a 0.7% price increase, but this might not reflect current conditions accurately. Nationwide reported a 0.9% fall, while Halifax indicated a significant 1.9% decrease in a single month. Rightmove's data showed the most substantial drop in asking prices for properties coming to market since 2018.
Predicting the Future
Looking ahead, predicting where the market will go in the next few months is challenging. However, certain trends offer some insights. Buyer numbers remain strong, and the volume of properties coming to market is robust. Mortgage lenders continue to provide support, and interest rates may have reached their peak, according to the Bank of England.
Moreover, ten-year gilt rates, which influence fixed mortgage rates, are hovering around four and a half percent. This makes mortgages with good deposits still relatively affordable for many buyers. Additionally, inflation, which has caused some market turmoil, appears to be coming under control.
A Potential Soft Landing
While property prices have declined, it seems that the conditions are aligning for a soft landing in the housing market. If prices have indeed fallen by around 6% or more, it's possible that we'll see this trend continue for the remainder of the year. However, it's essential to remember that market indexes are historical and may not fully reflect the current reality.
To stay updated on the evolving real estate landscape, keep watching our videos. We'll provide you with genuine, live updates about what's happening across the market.
In conclusion, the property market is experiencing some fluctuations, but it's showing signs of resiliency. With favorable conditions for buyers and homeowners, the market could find stability in the coming months. As always, it's essential to stay informed and adapt to the ever-changing real estate environment.
