House prices increase in October despite economic uncertainty
By Steve Cook – Partner Clarke Gammon
At a time when there seems very little by the way of positive news from the mainstream media, certainly where either the economy or the UK property market is concerned. I was encouraged to read this week, the recently published ‘House Price Index’ from the property portal Rightmove.
The October monthly price index confirms that the average price of property coming to market in the UK has increased by 0.9% this month to a new record of £371,158, the main cause being the shortage of property coming onto the market as well as the surprisingly continued strong buyer demand.
This new asking price record may seem out of sync with the current economic uncertainty, following the fallout from the government’s mini-budget in late September, but whatever impact there is from this, will take a little time to filter through to house prices.
Interestingly, the report shows little sign of any downward pressure on the prices of existing properties for sale, with the number of reductions up only 2% on last month to 23% of all properties reduced, which is still much lower than the pre-pandemic five-year average of 32%.
The report does however confirm that they expect asking prices to drop in November and December, which is the normal trend for the two months running up to Christmas, although prices are also likely to be under pressure from other economic factors.
Property price forecasts are at the forefront of the minds of many of us in the property business as well as would be buyers and sellers at the moment, but there are more economic events to play out before any predictions for the 2023 property market can be contemplated.
Higher mortgage interest rates
The recent rises in UK mortgage interest rates have been well documented, but how has this affected buyers and sellers within the local property market?
The increases in mortgage interest rates have understandably caused some would-be local buyers and sellers to pause their home moving plans, of those we have spoken to, most are still wanting to move but will wait to see what the next few weeks and months bring.
Nationally, Rightmove confirm that overall demand is down by 15% in the last two weeks compared with the same two weeks last year, but it is still 20% higher than the market of 2019.
Although market sectors have reacted differently, first-time buyers for example seem to have been the hardest hit, as higher mortgage rates may prove to be a step too far for those who were already stretching their finances. Rightmove confirms that demand in the first-time buyer sector is down by 21% in the last two weeks compared to the same two weeks last year, though it is still up 24% compared to the more normal market of 2019.
Existing buyers and sellers
Whilst some of those first-time buyers considering buying their first home are waiting to see what the future months will bring, those existing buyers and sellers that have already agreed a property purchase are holding steady.
With only 3.1% of sales agreed having fallen through in the two weeks since the mini-budget, which is in line with the 3.0% over the same two weeks during 2019. And certainly, those who managed to secure a mortgage offer at a lower rate are rushing to complete their purchase before that lower rate offer expires.
Considering a move this Autumn?
If you are thinking of buying or selling, or need some help or advice on property related matters, please give me a call at our Liphook office, I’m always happy to help.
Steve Cook
Partner Clarke Gammon
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Article written – 21/10/22