Property Blog and News / Fundamentals remain as the ‘new normal’ looks a lot like the old one

Fundamentals remain as the ‘new normal’ looks a lot like the old one

17 May 2023


Jamie Obertelli
Head of PR & Communications

Our latest Property Sentiment Index suggests that in April, a level of stability returned to the housing market and the ‘new normal’ appears to look a lot like the old one.

In April, 70% of UK buyers were confident they’d purchase a property within the next three months, a slight decrease when compared to March (71%); and 64% of sellers were confident they’d sell their properties within the next three months, up from 63% in March.

  • 70% of active buyers in the UK were confident that they would purchase a property within the next 3 months
  • 64% of sellers in the UK were confident that they would sell their property within the next 3 months
  • 43% of properties were Sold Subject to Contract (SSTC) within 30 days of first being advertised for sale, compared with 63% in April 2022
  • ‘New’ normal looking a lot like the old one

Our Chief Executive Officer, Jason Tebb, discusses the insights from our latest report:

As far as the housing market is concerned, April was all about getting back to ‘business as usual’. This is the new normal, and reassuringly, it looks a lot like the old one. A level of stability has returned to the market after a period of unprecedented uncertainty created by September’s mini-Budget, which sent the price of fixed-rate mortgages soaring. Inflation seems to be on the way down, albeit more slowly than hoped, and while another interest rate rise can’t be ruled out, market forecasts suggest that we’re nearing the end of these increases.

All in all, the fundamentals are encouraging for the property market. This is reflected in our data for April, with 70% of UK buyers confident that they’d purchase a property within the next three months, compared to 71% in March. As well as continuing confidence among buyers, our data shows seller sentiment remains stable, with 64% of sellers confident they’d sell their property within the next three months in April, compared with 63% in March. There are usually regional variations as there’s no such thing as a uniform property market but even so, this time around there was little fluctuation across the country in April. Meanwhile, nearly half (43%) of all properties were SSTC within 30 days of first being advertised for sale in April. While this is less than last April’s 63%, market conditions were very different then with double-digit price growth and the ‘race for space’ in full swing. Now, a welcome element of stability has returned, with the numbers perhaps impacted by the Easter holidays and the traditional seasonal dip in the market when families are away and house hunting isn’t a priority.

While Nationwide building society reports that house prices rose by 0.5% in April after seven consecutive months of falls, of more interest to agents are transaction numbers, as these are a much better indicator of the overall health of the market. Encouragingly, transaction numbers are also on the rise after months of declines, according to HM Revenue & Customs. Meanwhile, the Bank of England’s mortgage approvals for house purchases, an indicator of future borrowing, are also rising, although they remain below the monthly average for last year.

Some volatility is still evident when it comes to mortgages. Mortgage rates, which soared in the autumn before falling back in the early part of this year, have recently edged upwards again as Swap rates, which underpin the pricing of fixed rates, have risen once more. There’s good news for first-time buyers however, as lenders have been cutting rates on higher loan-to-value (LTV) mortgages, suggesting they’re confident about the prospects for the market.

A period of relative normality and stability will be extremely welcome after all the ups and downs of the past few months. People move for different reasons and are steadily getting on with the business of moving. Despite the recent upheaval, soaring inflation, the rising cost of living and higher mortgage rates, things are settling down and instead of peaks and troughs, the market has transformed into something more consistent. It would be fair to say that the market has rebalanced and looks as though it’s set for ‘business as usual’ going forwards.

You can read the full report here.

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