Latest: property market report

With the longest day of the year behind us and the midway point of 2023 passed, we can evaluate how the first half of the year has treated the sales market. Predictions have come true. The red hot conditions and extraordinary price hikes of the pandemic have subsided.

Nationwide’s June House Price Index is a good barometer for current and mid-term conditions. House prices are gently moderating but there is no boom or bust. When looking at year-on-year values, prices declined -3.4% in May 2023 and -3.5% in June 2023.

No drastic change to house prices

It’s definitely a ‘soft landing’ when looking at Nationwide’s monthly figures. In May, UK house prices declined by just -0.1%. In June, they rose +0.1%. It’s worth bearing in mind, however, that we usually see strong mid-year house price appreciation. The last eight weeks illustrate how the market is plateauing, despite fluctuations in the mortgage market.

Number of prospective purchasers rising

The latest figures from Propertymark are another useful tool when measuring how wider conditions are affecting home moving activity. When questioning its member agents, resilience was found among home movers.  In fact, there were more potential purchasers registered with estate agents in May (86), when compared to April (70).

With demand among buyers inching up, would-be sellers should be encouraged. Propertymark members have noted a reduction in the number of new homes coming to market. In April, there were 10 new homes being added to their books. This figure dropped to 9 in May. More choice of homes for sale is definitely needed with this increase in buyers, and a valuation is a good place to start.

A word of caution comes from Zoopla. New analysis by the portal revealed 42% of sellers are now accepting more than 5% off their asking price to secure a sale. This reinforces the importance of accurate pricing at the start and this is something we can help you with.

The UK’s rental market shows no sign of slowing down. A number of reports released in June concur when it comes to values and demand, starting with The Royal Institution of Chartered Surveyors. A broad but accurate snapshot detailed in its latest UK Residential Market Survey highlighted how tenant demand had increased and new landlord instructions had fallen.

Meanwhile Zoopla’s June report drilled down a little deeper into trends. It found annual rental inflation for new lets was up 10.4% year-on-year – the 15th consecutive double-digit rise. It also revealed average UK rents now account for 28.3% of average pre-tax earnings, compared to a 10-year average of 27%.

Zoopla and ONS agree on one thing

Weighing in on the latter is The Office of National Statistics (ONS). It also reported that the average Brit now spends 28% of their pre-tax earnings on rent. This, it says, is the highest percentage in a decade.

The ONS was, however, out of kilter with Zoopla when it came to how much rental values had risen in the last year. It found private rental prices paid by UK tenants increased by 5.0% in the 12 months to May 2023. This represented the ONS’s largest annual percentage change since January 2016 but it was less than half of the figure quoted by the portal.

Monthly & annual rental values rise again

Another rental report did mirror Zoopla’s findings. HomeLet’s June Rental Index also put the UK’s annual rental inflation at 10.4%. Scotland posted the biggest year-on-year rise, with 15.8% rental uplift, with Northern Ireland registering the smallest yearly gains, at 7.4%.

In terms of rental activity in the last four weeks, HomeLet says the cost of renting a property in the UK became 1.3% more expensive. The average monthly rent across the UK is now £1,299. The biggest monthly uplift was in Scotland (+5.5%), followed by the West Midlands (+1.9%) and Greater London (+1.9%).

If you would like to know more about your local property market, please get in touch.